Accountability in the Boardroom 2025
Shareholder Proposals
How Major Index Funds Voted on Climate, Inequality, and Unaccountable Technology Resolutions
Shareholder proposals have long served as a democratic safeguard in corporate governance. Investors have long relied on this tool as a core strategy for elevating corporate standards, curbing externality-generating behavior, redressing information asymmetries between shareholders and management, and surfacing and managing risks. Shareholder proposals, which are almost always non-binding, play a particularly important role in mitigating system-level risks because they often help test-drive regulatory concepts, generating evidence and momentum for policy reforms that scale to entire industries.
Overall support for shareholder proposals has steadily decreased over the past several years, even as system-level risks have intensified, in large part because the biggest asset managers have abandoned stewardship responsibilities in the face of coordinated political pressure from anti-ESG actors. More recently, the leadership of the SEC, alongside companies like ExxonMobil and state legislators seeking to weaken corporate governance laws, have mounted an assault on the entire 14a-8 process.¹ This organized attack is a backhanded testament to the power and utility of this longstanding corporate governance tool to organize and give voice to investor concerns and dissatisfaction.
Votes on Shareholder Proposals
Majority Action analyzed how broad-based equity index funds voted on 133 shareholder proposals that addressed system-level risks related to climate change, inequality, and unaccountable technology. The climate proposals we selected sought to assess and mitigate climate-related transition, physical, and market risks by encouraging companies to reconsider business strategies that undermine the decarbonization imperative, align business strategies and investment with a net-zero economy, and evaluate the equity impacts of energy transition activities. The inequality proposals we selected spanned five sub-categories that correspond to the Business Commission to Tackle Inequality’s (BCTI’s) list of “catalytic actions” that companies can take to address mounting inequality. Each of the five categories, according to the BCTI, represents “an avenue through which business exerts significant influence over the opportunities people have and the outcomes they experience.”⁴⁹ The final category comprises a newer crop of proposals that focused on the risks posed by entrenched technologies such as social media and emergent technologies such as AI. These proposals took up topics such as online child safety, misinformation and disinformation, data privacy, copyright infringement, energy and water use, and board oversight of said risks. While anti-ESG proposals were generally excluded from our universe, five of the unaccountable technology proposals in our analysis were filed by a prominent anti-ESG proponent, the National Legal and Policy Center. These proposals asked tech companies to issue reports on ethical AI data acquisition and usage. We included these proposals because they did not have an expressly anti-ESG objective, reflected credible concerns around AI governance and risks, and garnered considerable support from mainstream investors.
Our analysis found significant disparities in index funds’ proxy voting despite the fact that these funds share the same investment objectives (matching the benchmark return), use the same investment strategies (buy-and-hold), track similar broad-based indices, and have comparable exposure to system-level risks. These disparities map onto key differentiating characteristics such as asset manager, fund size, and where the fund is available for purchase.
Voting power is disproportionately concentrated in the hands of mega funds, which are uniquely positioned to shift corporate behavior at scale and mitigate system-level risks through proxy voting. However, managers of mega funds were the least likely to vote for shareholder proposals addressing system-level issues. BlackRock, Vanguard, Fidelity, and Charles Schwab, which collectively manage more than $6 trillion in broad-based equity index assets, voted against all or nearly every shareholder proposal during the 2025 season. Large funds managed by Nuveen and Northern Trust—and to a lesser extent, State Street—were more supportive. Mid-size funds emerged as the clear leaders on active stewardship, with New York Life’s NYLI S&P 500 Index Fund (MSXAX) voting for 98.1% of proposals. Mid-size funds as a whole outperformed large and mega funds, even when excluding the outlier case of MSXAX. Across all categories of shareholder proposals, the average level of support provided by the median and 75th percentile mid-size fund was higher than that for the median and 75th percentile large and mega funds.
Comparing across categories, funds were generally less supportive of climate proposals than they were of inequality or unaccountable technology proposals. Nuveen was the only asset manager whose average support for climate proposals exceeded its average support for inequality and unaccountable technology proposals. In particular, fund managers appear to be increasingly concerned about curbing AI’s negative externalities and ensuring there is board accountability for AI oversight. Eleven US-based funds supported on average 40% or more of unaccountable technology proposals, indicating an openness to implementing AI guardrails and a desire to limit the excesses wrought by today’s tech monopolies.
Finally, in keeping with longstanding trends, European managers of funds based in Europe outperformed US-based fund managers. Among European managers, Amundi and Legal & General had a stronger voting record than DWS and UBS. The divergence between European and US-based managers is especially evident when comparing across funds that track the same benchmark index. BlackRock’s iShares MSCI World ETF voted for just 2% of all shareholder proposals, while analogous MSCI World index funds managed by Amundi, DWS, and UBS voted for 99%, 62%, and 45%, respectively. In contrast to DWS’ European fund, DWS’ US-based fund did not support a single shareholder proposal. On the one hand, European legal and regulatory frameworks more explicitly incorporate ESG considerations into fiduciary responsibilities, and as a result, European asset owners have been at the forefront of embracing universal ownership theory and operationalizing system stewardship strategies.² On the other hand, while US fiduciary frameworks are more constrained, broad-based equity index funds in the US are exposed to the same system-level risks as their European counterparts, calling into question why US fund managers are not deploying comparable stewardship approaches to protect the interests of long-term beneficiaries.
