Proxy-voting concern

In this post-Enron environment, the investing public is looking for greater accountability of its corporate leaders. In that spirit, the Securities and Exchange Commission is requiring, starting later this year, registered management investment companies to disclose how they vote proxies related to the portfolio securities they hold. They are also required to disclose the policies and procedures that they use to determine how to vote proxies related to their portfolio securities. The new SEC rule requiring disclosure and transparency has eroded the curtain of secrecy that prevented beneficial owners and the investment world from learning how investment managers vote proxies - or whether the proxies are voted at all. A review of various managers' disclosures reveals an apparent safe harbor for managers through the use of guidance provided by businesses created to provide direction to institutional shareholders. Among the most well known of these businesses is Institutional Shareholder Services Inc., Rockville, Md., which provides proxy voting and corporate governance services to institutional and corporate clients worldwide.