Financial Times features letter from Tumelo's CEO in top slot

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The Financial Times published the following letter penned by Tumelo's CEO, Georgia Stewart, on October 16th, 2024. 


In the FT article “Vanguard experiment finds investors prefer to defer” (Report, September 18) you note that nearly half of the participants in the pilot programme set up by the asset manager to allow investors to vote their shares chose to let Vanguard do it for them.

Respectfully, I don’t think the headline is a true reflection of the pilot’s results and I think another story could be told here. Yes, 45 per cent aligned with Vanguard’s default policy, but that also means that 55 per cent did not. So, rather than a passive acceptance of the status quo, we see the majority of investors who participated in fact decided to vote differently from their fund manager. At Tumelo we equip investors to use their voting power, so we may be idealists — but your readers appear to agree with us, if comments online are any guide.

We’re talking about 22,000 investors choosing to vote differently from Vanguard. For most, this will be the first time they’ve ever made a choice about voting their stock. For context, in the early 2010s, 25,000 people had subscribed to Netflix and its peers, instead of sticking to cable. By 2021, Netflix had over 200mn subscribers, revolutionising how we watch TV. Food for thought.

The idea that investors are comfortable letting asset managers call the shots on proxy voting is oversimplified. Proxy voting is often a maze of legal jargon and spreadsheets — hardly a task the average investor gets excited about. Letting managers step in isn’t a sign of lack of interest. It’s about time, expertise and the lack of user-friendly tools. Everything is still managed by email and post, even for this pilot. There’s a reason Netflix moved away from posting DVDs to the home.

Early engagement may seem modest, but new systems take time — Rome wasn’t built in a day, nor is a fully engaged shareholder base. The expanding proxy-voting programmes at Vanguard, BlackRock, State Street and Legal & General Investment Management show demand for investor input. The push for democratised voting closely mirrors current trends towards transparency and accountability. Dismissing these efforts based on early opt-in rates misses the point — this marks an important shift towards a more engaged, empowered investor base.

So, in short, I beg to differ with the “prefer to defer” verdict.

 

Georgia Stewart Chief Executive, Tumelo, Bristol, UK

Read the letter in the FT here.