Business and Society

Alarming investigation into proxy voting

April 2, 2013 | 2 min read

In April, Robeco received a call from a financial institution, asking why we had voted against its incentive program. We were puzzled, as we had not voted against it. It turned out that our vote had been processed incorrectly. As engagement specialists at Robeco, we experience similar hiccups every year. So does every other asset manager. In a sense, it should be no surprise, as the proxy voting process is complex and opaque. Up to ten parties may handle a voting instruction. Parties in this chain can include voting agents, intermediaries, custodians, sub-custodians, notaries and registrars.

It is clear that such complexity provides plenty of opportunities for mistakes to be made. But what is not so certain is how often such errors occur. Is it only every now and then, or is it more like the norm? We decided to investigate. Robeco votes at approximately 3,000 shareholder meetings each year so there was good reason to do so.

16 companies in our audit

We selected 16 companies for a vote audit. We asked the companies to confirm our votes for their AGMs. If they could not, we traced the votes back along the voting chain to find out what happened to them. The results were shocking. Only five companies could confirm our votes. In the other cases, we were either directed to other parties in the chain or were asked for account-detail information that it was impossible to provide. For three of the AGMs, we received no confirmation. At one meeting, our custodian processed instructions for fewer stocks then we had issued instructions for. Stock lending and selling activity may account for some of the difference, but not for the amount we found. In another case, we found that our instruction was processed as a vote against a motion, whereas we had voted in favor of it.

There are several reasons why companies might have been unable to confirm votes. The most serious relates to the structure of the voting chain. For omnibus accounts, custodians process votes in bulk. As such, it is almost impossible to confirm what happened to votes all the way to the company. But even when votes are processed separately, it is still difficult to track them. Sub-custodians and other parties often use different registered names and types of account identifiers. During our investigation, we were inundated with requests for a plethora of identifiers and account details — including ‘skontro’ numbers and Brazilian tax-registration numbers. When we could not provide this information, we were pointed towards the party one step back in the chain. Unhelpfully, they often needed a different set of identification details.

Results were alarming

Overall, the picture that emerged from our investigation is alarming. One would expect that in the second decade of the 21st century it would be technically possible to process voting instructions correctly and to have these votes confirmed easily. But it isn’t. Bringing this about will require standardization of infrastructure and technology. However, the first step in achieving any improvements in vote confirmation will be the collaboration of all the parties in the chain.


This article may be reproduced according to our terms of use with attribution (and link, if online) to To be cited as: “Alarming investigation into proxy voting”, Van Esch, Michiel,and Carola van Lamoen,, April 2, 2013.


Carola van Lamoen

Senior engagement specialist Robeco

Michiel  van Esch

Engagement specialist Robeco

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