Vanguard Publishes 2020 Annual Investment Stewardship Report

Image via Vanguard.

vanguardVanguard has released its 2020 Investment Stewardship Annual Report, which provides an in-depth view into company engagements, including case studies, the rationale for a number of votes, and summaries of its mutual funds’ voting activities from the year ended June 30, 2020.

The report is centered on Vanguard’s four principles of good governance:

  • a well-composed board
  • effective oversight of strategy and risk
  • performance-linked executive compensation
  • shareholder rights

It describes how recent events – such as the COVID-19 pandemic, economic uncertainty, the escalating climate crisis, and an historic social justice movement – have brought environmental, social, and governance risks into sharp focus.

“During this period of global uncertainty, the importance of remaining focused on the long term has never been clearer, and good governance has never been more important,” said Anne Robinson, managing director and general counsel for Vanguard. “Vanguard’s Investment Stewardship team will continue to work with companies and hold them accountable to promote and protect long-term value for our investors.”

For the year ended June 30, 2020, Vanguard’s Investment Stewardship team engaged with nearly 800 companies across 27 countries and voted on more than 168,000 proposals on behalf of Vanguard funds. Key areas of focus during engagements included board composition and executive compensation, which accounted for 70 percent and 47 percent of engagements, respectively. The team also engaged with 258 companies in carbon-intensive industries, or 33 percent of total engagements. Specific to oversight of strategy and risk, Vanguard increased engagements with portfolio companies on matters related to climate change and diversity. Vanguard will continue to closely observe these issues in the future.

In addition to unveiling the annual report, Vanguard also announced today the appointment of John Galloway as Vanguard’s new Global Head of Investment Stewardship. Galloway is responsible for leading the evolution of Vanguard’s stewardship practice, which includes publicly advocating for high standards of corporate governance around the world, engaging with company boards and leaders on governance practices, and voting proxy ballots to represent the long-term interests of Vanguard’s diverse investor base.

He succeeds Glenn Booraem, who led Vanguard’s Stewardship team for the past two decades. Booraem will stay on Vanguard’s Investment Stewardship leadership team as a senior advisor as he takes on additional responsibilities helping the firm understand changing client perspectives and navigate the evolving regulatory and disclosure environment.

“Vanguard’s Investment Stewardship team represents the interests of our investors and tirelessly advocates for better governance and stewardship practices,” said Robinson. “I would like to take this opportunity to thank Glenn for his efforts in building the foundation of our Stewardship program. I’m excited for the opportunities ahead for the team, as they represent Vanguard investors amid the shifting landscape of governance practices and expectations.”

Established in 2001, Vanguard’s Investment Stewardship team has grown into one of the world’s largest investment stewardship teams, comprising 35 governance professionals with a diverse mix of skills and experience.

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