Mutual Fund Managers Vote In A Management-Friendly Way, Concludes Stanford Study

A study by Stanford Graduate School of Business faculty member Michael Ostrovsky suggests that shareholding mutual funds vote in ways that protect them from negative reprisals. According to the report, some mutual funds 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, he says, when fund managers or proxy oversight committees casting the votes don’t like a particular candidate, they typically won’t say “no” unless they sense that a critical mass of other funds will do the same.