In an open letter to the boards and senior leaders of the publicly traded companies worldwide, Vanguard Chairman and CEO Bill McNabb outlines key focus areas of our Investment Stewardship program, including the following:

  • A high-functioning, well-composed, diverse board of directors.
  • Good governance structures, with directors standing for election annually.
  • Performance-linked compensation policies.
  • Effective and integrated risk oversight that is communicated to shareholders.
  • The importance of ongoing engagement between boards and shareholders.

Our Investment Stewardship team

Vanguard’s Investment Stewardship team advocates for responsible corporate governance practices at companies in which the Vanguard funds invest. The team is made up of an experienced group of senior leaders and analysts who are responsible for company engagement and proxy voting on behalf of the Vanguard funds.

The team supports effective corporate governance in 3 ways:

  • By advocating on issues and policies that we believe will enhance the sustainable, long-term value of clients’ investments.
  • By engaging in “quiet diplomacy focused on results,” which in our view will better position companies to deliver long-term progress over short-term gain.
  • By voting proxies at company shareholder meetings across each of our portfolios and around the globe.

Our process is iterative and ongoing and has led to nearly 1,000 engagements with almost 700 companies during the 12-month period covered by the report. Over the same time period, Vanguard funds cast proxy votes at approximately 18,900 shareholder meetings (covering more than 171,000 individual ballot items across 67 countries).

“Our Investment Stewardship team serves as a voice for investors,” noted McNabb. “Our program is grounded in the belief that great governance helps promote and sustain long-term value for our funds’ shareholders. The ongoing engagement with portfolio companies is one way in which we serve investors’ interests.”

Investment Stewardship Officer Glenn Booraem added that this year has been an important time in the evolution of the program. “You can expect us to speak out when we detect threats to our shareholders’ economic interests. Increasingly, you’ll also see us take more public positions on select governance topics such as climate risk disclosure and gender diversity on boards. Our team and our views have continued to evolve, but our focus on the long-term interests of Vanguard shareholders remains unwavering.”

The importance of communicating our advocacy

This year’s expanded annual report is part of the team’s plans to create more comprehensive reporting on Vanguard’s Investment Stewardship program.

“Our focus on corporate governance and investment stewardship has been and will continue to be a deliberate manifestation of Vanguard’s core purpose,” noted McNabb in the letter. “Because we are essentially permanent owners of [most publicly traded companies], we are obligated to be active stewards.”


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