A group of Republican senators introduced a bill Wednesday that would require large passive fund managers to vote proxies in accordance with individual investors’ instructions instead of at the managers’ discretion.
Sen. Dan Sullivan, R-Alaska, and 10 co-sponsors introduced the Investor Democracy is Expected Act, or INDEX Act, in an effort to reduce money managers’ influence over public companies.
Under the bill, passive fund managers that own more than 1% of a company’s shares would be responsible for collecting individual investors’ instructions and voting according to the investors’ wishes.
Further, the bill stipulates that mangers cannot vote without instructions from fund investors, except for routine matters like ratification of auditors, which will avoid concerns about shareholder meeting quorums, a summary from Mr. Sullivan’s office noted. Most notable matters, such as changes of control, director elections and shareholder proposals, are not routine, the summary added.
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