Podcasts - 21.11.2023 - 08:00
Innovations in Sustainable Finance #11: The Promise of Pass-Through Voting
Can you imagine voting yourself on who should sit on the board of a company you are invested in? Perhaps on your cellphone?
Source: HSG Newsroom
In the new episode of his podcast «Innovations in Sustainable Finance», host Prof. Julian Kölbel discusses with Georgia Stewart, Co-founder and CEO of Tumelo, how their technology democratizes shareholder voting and explores the opportunities and risks that direct shareholder voting presents in the context of sustainable finance.
Nowadays, shareholder voting is usually delegated to asset managers, raising questions about whether the voice of the ultimate owners is heard. Georgia introduces the concept of “Pass-through Voting,” which allows investors in pooled funds to vote at company AGMs proportionate to their fund ownership. She explains how Tumelo’s technology not only aligns the interests of shareholders and corporations but also increases shareholder participation and engagement.
- Pass-through voting potentially empowers long-term thinking investors to have a say, shifting the voting power from short-term focused asset managers
- Even if “Expression on Wish” doesn’t directly empower shareholders to vote, it can increase people’s interest and engagement in financial matters, including saving and investing.
- While there is a debate about whether “direct democracy” is a good idea in the context of shareholder voting, shareholders have a right to vote that was difficult to realize so far. New technology, such as Tumelo’s, can help realize it.
- Similar to a representative democracy, interest groups such as NGOs could take the role of parties that provide voting guidance, helping individuals make informed choices.