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Costco shareholders overwhelmingly reject anti-DEI proposal
(www.businessinsider.com)
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this post was submitted on 24 Jan 2025
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The "shareholders" are mostly just Vanguard/Black Rock/etc. mutual fund managers who always vote for whatever the board recommends. So yes, just the corporation.
Shareholder revolts against board proposals are exceedingly rare, and basically only happen when some individual rich fuck owns way too many shares.
Right, but those mutual fund managers don't just vote "yes" because they aren't paying attention. If anything, they are paying lots of attention, and get special treatment, since they own so much of the company, and were likely consulted ahead of this move.
And they are most definitely not bleeding-heart liberals. If they voted for this proposal it's because they think it will lead to better outcomes for the company.
Let's be clear about this: the fund managers own nothing. They are employed to manage the mutual funds that other people -- you and me and everybody else with a retirement account -- actually own. They disenfranchise us, the actual owners.
(Yes, technically, it's true that the individual company shares are owned by the corporate entity of the mutual fund itself, and that what the mom & pop investors technically own shares in that fund. But that does not make it fair to say that anybody but the mom & pop investors deserve to vote the individual company shares, because it's their money that's being used for the whole thing!)
If keeping DEI is better, why didn't they demand it for all the other corporations whose boards didn't propose keeping it? The answer is, again, the fund managers almost always just rubber-stamp the board. To claim that fund managers are actually forming their own opinion on the efficacy of DEI and influencing corporate governance accordingly is simply not true.
In theory, mutual fund managers are acting on mutual fund share holders' behalf. In practice, "shareholders" of most large corporations are effectively asleep at the wheel -- the investment industry literally calls shares held in index funds "dumb money" -- and boards of directors can do pretty much whatever the fuck they want. In the era of huge mutual funds, especially index funds where the even the choice of which companies to own shares in is no longer a feedback mechanism, the check & balance of shareholder control is basically broken.
The fix is "pass-through voting," by the way:
https://corpgov.law.harvard.edu/2024/04/17/pass-through-voting-giving-individual-investors-a-voice-in-corporate-governance/
https://www.morningstar.com/funds/new-proxy-voting-options-ivv-other-index-funds-blackrock-state-street-vanguard
That may a fair take, but take a moment to turn that around. The fact that fund managers are not forming their own opinion against the efficacy of DEI and influencing corporate governance accordingly is a sign that it's simply not as harmful as Republicans let on, and may actually be helpful. Because they know how to wield that influence if they feel they need to in order to preserve their funds' value.
I didn't say not forming their own opinion "against;" I said "on" -- i.e., not forming their own opinion about the topic at all, in either direction. It is not an argument that can be "turned around" in the way you claim.
When boards oppose DEI, fund managers support the board. When boards support DEI, fund managers support the board. My point this entire time has been that there is no influence being wielded here. The companies that are cancelling DEI policies are doing so on their own boards'/execs' initiative with no meaningful shareholder control, and the companies that are keeping DEI policies are likewise doing so on their own boards'/execs' initiative with no meaningful shareholder control.
I hadn't thought about it quite like this before, so thank you for your comment