ip O'Neill is known for saying that all politics is local, an updated saw for the fund industry might add that all regulation is local also. TIAA-CREF
, a firm known for taking a progressive stance on corporate governance issues is recommending that its shareholders vote "no" on a proxy requiring that it disclose how it votes the proxies held by its funds. The vote is taking place today at the firm's annual shareholder meeting in Charlotte, North Carolina.
A pair of college professors who are covered by TIAA-CREF's retirement product submitted the proxy. Their resolution (two on the ballot) would require CREF to report to its participants, at least annually, how it voted its proxies on shareholder resolutions involving social and environmental issues, and how it has integrated those issues into its investment decisions and dealings with portfolio companies.
TIAA-CREF's board explained to shareholders that while it shares the proponents' concerns for environmental and social issues, it does not believe it would serve the best interests of TIAA-CREF participants to adopt the proposal as currently conceived at this time.
It further added that CREF's governance committee might find specific resolutions "flawed or too impractical to implement." In those cases it often abstains from voting and instead write a letter to the company explaining its vote.
It also is concerned about the possibility that by disclosing its votes it would hamper its ability to negotiate issues with company managements. "Indeed, some of TIAA-CREF's votes are based on discussions with companies, and, without that information, our specific votes cannot be fully understood. We believe it is important to maintain the confidentiality of those discussions since, in our experience, we have found that more can be accomplished through quiet diplomacy than through public confrontation," wrote TIAA-CREF in its proxy statement.
Since this story was first posted, TIAA-CREF has announced that shareholders today rejected all four proposals, including the one on proxy voting disclosure.
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