I agree- it certainly makes very little difference per shareholder, in the same way that individual votes make very little difference for who gets elected president of the country.

One reason that the shareholder votes are already mostly pre-decided is because so few people vote. Major indexing companies usually side with the board of directors, and votes that abstain essentially count against shareholder proposals. With so much of it running on autopilot, the results are highly predictable and turn out in favor of the board of directors most of the time. But it’s a price we pay for convenience.

Thanks for the info. Good point about giving up voting rights with index investing.
My understanding is these votes are already decided in a lot of cases and only there for lip service. I’m sure there are exceptions but if I owned a few thousand shares of any company I doubt my vote would make much of a difference.
At least you have some theroretical say in the direction of the company with direct ownership but I doubt it makes much difference.

Tom @ HIP

Each year, shareholders can submit proposals to the board of directors, and shareholders may vote on those proposals to show where they stand on the issue as the company owners. This can influence what the direction the board takes the company in.

One of the very few downsides of index funds is that investors give up their voting rights to the index company. Vanguard, for example, is the largest shareholder for many publicly traded companies, and votes “no” on most shareholder proposals, because they try not to take sides, maintain a pretty simple methodology for voting, and they’re transparent about all their votes.

For example, one shareholder proposal for Pepsi was for them to adopt quantitative renewable energy goals, and Vanguard voted no. Another shareholder proposal for Exxon Mobil was for them to provide a report to shareholders on all the lobbying payments they make to politicians, and Vanguard voted no. A shareholder proposal for Amazon asked them to use sustainability goals as one metric of executive compensation, and Vanguard voted no.

Just looked up greenwashing — “disinformation disseminated by an organization so as to present an environmentally responsible public image.” Boooooooooo…

I haven’t played too much with the Stash app but I’d be interested to see the difference in costs among those funds you mentioned. If I’m just putting more money in the fund managers pockets and not advancing my values, I don’t get too excited about that.
I’m glad I made you think a little bit more :)

Tom @ HIP

Thanks, Chris.
I don’t know how much difference one proxy vote is gonna make. It seems like the board of directors run unopposed for the most part when it comes to shareholder votes, but it’s better than not having a vote at all.
Most of us are too small to make a difference in a huge corporation with our votes but we can make a difference to the park near our home or the neighbor who’s water heater blew up and car transmission crapped out. That’s why I invest and give the way I do.

Tom @ HIP

Personally, I put most of our retirement savings in index funds for the same reasons you listed. I do have a small chunk that I buy individual stocks with and have chosen companies that align with my values.

My theory is that the companies following these values are setting themselves up for long-term success, so they are a worthwhile investment.

So far, that’s led me to a couple that have performed well in the last 5 years but we’ll see what the future holds :)

I know the Stash app offers asset packages based on social and environmental causes. If you are passionate about the environment for example, you have the option to invest your Stash dollars in the Clean and Green Fund (which buys you shares of iShares Global Clean Energy ETF). Or you could invest only in socially responsible companies with Stash’s Do The Right Thing Fund (iShares MSCI USA ESG Select Fund).

So Stash makes it easy to kinda sorta invest in a kinda sorta socially responsible way. But as this post points out, it’s not maximizing your investment or maximizing your potentially positive social impact.

that would be fascinating!! would probably take 100x longer to get new products out the door, but maybe it would make all us consumers appreciate everything we’ve got even more ;) and then for all those who “need” to upgrade it spreads that out longer too, haha…