May 17, 2016
The Vanguard Group Holds Twitter Investor Q&A ‘Chat with Financial Planners’ – It Ends Badly
Investors and Clients Overwhelm Session With Queries on Corporate Political Disclosure
Vanguard, the largest mutual fund company in the country, attempted to use a popular social media tactic to its advantage on Tuesday, but was thwarted by investors and clients taking advantage of the “ask me anything” format. The groups emphatically used the Twitter session to call on Vanguard to support political spending disclosure. Vanguard’s Twitter handle announced a chat with financial planners at 11:50 a.m. ET, but by the time the chat ended, more than 90 percent of the tweets were from investors and activists asking the company to support shareholder resolutions that would bring about political spending disclosure.
Background: For years, shareholders have put forth resolutions at public companies calling on the companies to publicly disclose their spending in politics. However, these resolutions rarely receive majority votes because major mutual fund companies like Vanguard control large percentages of the shares and usually vote against or abstain from voting on these resolutions.
More than 65,000 current and prospective clients have written to Vanguard asking the fund’s leadership to change its voting habits and support disclosure at public companies. Since the U.S. Supreme Court’s 2010 decision in Citizens United opened the floodgates for corporate political spending, shareholders deserve to know how their investments are being spent, especially if these dollars are going to politics.
Supporters are calling on Vanguard to change its proxy voting guidelines to always support political spending disclosure at the companies in which it invests.
Corporate Reform Coalition
Shareholders offer political disclosure resolutions.