Vanguard, the largest fund family, is beginning to wield that power more aggressively. It has adopted a new approach to push for improvements to compensation practices, board construction, and other corporate issues, says Glenn Booraem, head of its corporate governance efforts.
Vanguard is now sifting through data, looking for companies that don't adhere to mainstream good-governance principles and then pressing the companies about its concerns.
My message to Glenn is: Stop it. Set aside the fact that shareholder activism is bad for corporate governance, the economy, and world peace. I buy index funds precisely because they are PASSIVE! I don't want index funds spending one dime more than necessary. I want my funds to keep costs as low as possible, because the evidence is clear that over time that's the best way to build wealth. So I don't want Vanguard paying multiple analysts 6-figure salaries to look for activism opportunities. If we must have shareholder activism, I want Vanguard to free ride on the efforts of others.
And if this nonsense keeps up, I will vote with my feet.
