Episode 9: The Emergence of Pass-through Voting and its Implications for Shareholder Stewardship

Suren Gomtsyan talks to Tom Gosling about their paper "The Emergence of Pass-through Voting and its Implications for Shareholder Stewardship". Pass-through voting describes a range of approaches to enable investors in pooled investment funds to direct how the asset manager of the fund votes on shareholder resolutions at companies held by the fund. Suren and Tom discuss how the changing nature of investor stewardship, growth of index investing, and growing divergence of views on ESG issues have inevitably led to the emergence of pass-through voting. They discuss the motivations for asset owners and asset managers adopting the practice, and reasons why they might choose not to do so. They also discuss how the growth in pass-through voting could affect investor stewardship: while it allows views of the ultimate investors in the fund to be more directly reflected, it also has the potential to weaken stewardship by separating voting and engagement, and could create a more fragmented engagement landscape for companies.

Host: ⁠⁠Tom Gosling ⁠⁠⁠Contributor: Suren Gomtsyan

Read the paper: The Emergence of Pass-through Voting and its Implications for Shareholder Stewardship