Running away with your vote

In March, when Ruth Poglitsh got an email from her investment firm offering to represent her at upcoming shareholder meetings, she was intrigued. The email touted a “proxy voting choice program,” in which the firm would vote for (or against) shareholder proposals on Poglitsh’s behalf. As a shareholder, she could choose a preset voting policy that reflected her values. Among the options: an “ISS Catholic Faith-Based Policy.”

As a Roman Catholic, Poglitsh’s first thought was, “This is brilliant.”

Yet when she dug deeper, the policy wasn’t what she expected. Navigating a 100-page PDF full of corporate jargon, Poglitsh did a word search for “LGBT.” The results revealed a supposedly Catholic voting guideline that stated, “Vote against shareholder proposals that seek to eliminate protection already afforded to LGBTQ employees.” When she searched for environmental guidelines, she found one that supported proposals “seeking increased investment in renewable energy sources.”

Essentially, if she selected the “Catholic” voting preset, her investment funds’ shares might support proposals allowing men into women’s restrooms or promoting company benefits for employees’ gay partners. Her shares might also support climate proposals she didn’t agree with. Such directives didn’t represent Poglitsh’s values at all.

Conservatives in recent years have pushed back against the progressive agenda at the ballot box, with some success. Meanwhile, their money has often been quietly voting in the opposite direction in annual shareholder meetings for companies around the world. Now some conservatives like Poglitsh are catching on—and raising the alarm.

Ruth Poglitsh and her husband are among the 126 million Americans who own stock in investment funds. Such funds own about one-third of all corporate stock in the United States, giving fund investors tremendous influence with corporations.

Think of an investment fund as a bucket into which a group of people have dumped their money: The bucket, in turn, buys and owns stocks in various companies. An investment firm such as BlackRock, Vanguard, Fidelity, or State Street then manages that bucket.

Investment firms are typically focused on the profitability of the companies they invest in, not on shareholder proposals circulating boardrooms. Those proposals can include nominations for a corporation’s board of directors, carbon-emission reduction goals, or requests for a review of the company’s connection to vice industries such as tobacco. To help them navigate the many shareholder proposals put forward at U.S. companies each year, investment funds hire proxy voting advisory firms to research proposals and advise them how to vote. In the United States, the two biggest proxy voting advisory firms are Glass Lewis and ISS.

Conservatives have accused major investment firms such as BlackRock and Vanguard of supporting left-wing social priorities in corporate boardrooms. Jerry Bowyer, head of Bowyer Research (and a WORLD Opinions contributor), says conservatives have unwittingly allowed their shareholder votes to support un-Biblical proposals at annual meetings in recent years. Investment firms and proxy voting firms have used conservatives’ shareholder voting power to oppose proposals condemning the debanking of conservatives and to oppose efforts to silence pro-abortion stances at major U.S. companies, he said.

The ISS Catholic policy Poglitsh reviewed supports proposals opposing abortion, predatory lending practices, and pornographic content. But the guidelines also oppose nuclear power and support reduced carbon emissions.

State Street Investment Management, Poglitsh’s investment firm, doesn’t offer any faith-based policy besides the Catholic one. If investors don’t choose a policy, State Street will vote its default policy on their behalf. (The company recently began offering a proxy voting policy written by Bowyer Research, but it’s available only for clients that are government entities.)

Glass Lewis also offers a Catholic-themed voting policy. It, too, supports climate-conscious positions, and it supports shareholder “resolutions that seek to prevent discrimination based on … sexual orientation.”

ISS did not respond to a request for comment. In a written statement, Glass Lewis told me it worked with a selection of its customers to create its Catholic policy guidelines. The guidelines were designed to reflect those clients’ values, not the values of all Catholics, the company said.

“We provide analysis and data to inform our investor clients’ vote decision and, where instructed, implement the voting policies chosen by our clients,” Glass Lewis added. “Actual votes are audited regularly to ensure that they have been cast in accordance with the client’s own voting policy.”

Inspire Investing, a Christian investment company, does its own proxy voting. Although the company relies on research by firms like Strive Asset Management and Bowyer Research for information about proposals, portfolio manager Tim Schwarzenberger said his team doesn’t trust ISS and Glass Lewis to vote for them.

Schwarzenberger said Christians need to be aware of how their shares are being used. “You’ve already basically hired someone to vote on your behalf, whether you know it or not,” he said. “You’re voting your proxies. Now, is that in alignment with your values, or is it not?”

Last year, Inspire Investing sent a petition to Glass Lewis and ISS urging them to create voting guidelines that reflect the values of Christians and others opposed to left-leaning agenda items. “It’s starting to change,” Schwarzenber­ger said. “But it’s not quite there.”

Jerry Bowyer urges Christians—and Christian ministries—to ask their financial advisers for specific, detailed answers on how their money is voting. “And don’t take ‘I don’t know’ for a valid answer,” he said.

Meanwhile, people like Ruth Poglitsh are left trying to find the least bad option out of the ones their investment firms offer. She told me she ultimately ended up signing on to a proxy voting policy that avoided political agendas and focused only on maximizing shareholder return.

She recognizes such neutrality doesn’t represent a perfect way to run a U.S. business. “Because there are values—we are human beings, and we have values,” she said. “But I would rather that they do that than they’d be promoting values that I’m opposed to.”