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Stanford Business School Research: Mutual Funds Vote Strategically in Board of Director Elections.

Business Wire

| May 18, 2007 | COPYRIGHT 2007 Business Wire. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

STANFORD, Calif. -- How mutual funds operate in electing corporate board directors for firms in which they are invested was a topic once shrouded in confidentiality and mystery. But the 2003 Securities and Exchange Commission mandate that mutual funds disclose their proxy voting opened up a world of information on the ins and outs of voting behavior. Stanford Graduate School of Business faculty member Michael Ostrovsky has combed through several years of data to discover that mutual funds vote in ways that protect them from negative reprisals.

Some mutual funds, he found, tend to be "management friendly" -- consistently approving slates of directors proposed by corporate management. Others, however, are more inclined to register opposition. Even more interesting, when fund managers or proxy oversight committees casting the ...

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