It has become commonplace to hear the corporate proxy voting system described as “broken” or “dysfunctional,” yet its most fundamental defect is mostly ignored:  the absence of retail investor participation.  If the voters from an entire region of the country – say the Southwest – did not show up at the polls for presidential elections, most would agree that there was a problem.  At the very time when shareholders are calling for greater access to the corporate proxy, it is more important than ever that proxy voting represent the views of all shareholder constituencies in rough proportion to their numbers.

Overall, the voting rate among individual investors hovers at the 20% level.  Companies that mail their investors a notice that the materials are available on the internet – in lieu of mailing the all materials in paper – have seen even lower voting levels in the 5% range.

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