Democratisation of shareholder voting

On this International Day of Democracy...

What is shareholder democracy?

Millions of ordinary people (like you, me, and even your quirky neighbour) pay into our investment system through workplace pensions, ISAs, and other investments. When we do that, our money is invested in publicly listed companies (like Facebook, Google, Tesla).

At least once a year, these companies must hold an Annual General Meeting where shareholders get to vote on important issues like company directors, climate change, human rights, renumeration and equality. This is one way for shareholders to influence key strategic decisions at the world’s biggest companies.

But I'm guessing you have no visibility over where your money is actually going and no voice at those companies you own through your investments.

The result? A disengaged society and an authoritarian investment system.

How powerful are the big three?

Currently, the 'big three' fund managers (BlackRock, Vanguard and State Street) cast approximately 23.5% of the votes at America's biggest companies. This could rise to 40.8% by the mid-2030s if recent trends continue. This makes them the most powerful actors in corporate governance in the world.

ShareAction, a responsible investment charity, shows that the big three routinely vote against environmental and social action at companies, voting differently to their proxy advisers’ recommendations about three-quarters of the time on environmental, social and political lobbying proposals.

Still, today, no investors in these funds get a say on individual votes.

Tumelo was created to work with fund managers to change this. Most fund managers are excited, and boy, do we feel passionate about it.

We want every investor to have their shareholder's vote by 2030.

We believe all investors in the stock market (pension members, retail investors and asset owners, like trustees) should be aware of the companies they are invested in and should have influence and a voice at those companies' Annual General Meetings (AGMs).

Why do we care so much?

Public companies have the power to break or make our planet and society. What companies do really matters. What shareholders demand, and hold them accountable for, really matters. Restoring the right to be heard, really matters.

Who else is in?

It used to feel like we were screaming into a void, but that quiet world is long gone. Aside from some amazing charities - like ShareAction - there are more and more companies being born, innovating to achieve democracy within financial markets. Companies like TulipShare are rallying direct shareholders to win activist campaigns; Troop is challenging hedge funds to engage retail investors in their own proxy battles; and Democracy Investments has teamed up with The Economist to launch the Democracy Investments International Index. Their fund holds companies from around the world but is weighted towards democratic countries and away from authoritarian regimes.

How do we get there? We empower.

In all of these examples, investors are empowered with awareness, education, transparency, tools and simplicity, whether they are invested indirectly through funds or directly with shares in the company. That's our aim with the Tumelo products. We have a journey ahead of us but with 57,500 votes cast already through our products, the crowds are gathering.

Georgia Stewart

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