Top U.S. mutual fund company Vanguard Group will be more likely to support measures giving shareholders new power over the makeup of corporate boards, a boost for reformers heading into the spring proxy season.
A Vanguard spokeswoman said Friday that under a policy change made this week its mutual funds will generally back so-called "proxy access" proposals for groups of investors who together own as little as 3 percent of a company's shares, down from 5 percent previously.
The proposals make it easier for investors to run their own corporate director candidates. Backers like New York City Comptroller Scott Stringer, who oversees public pension money, say the changes make boards more accountable.
Dozens of companies adopted such changes last year after proxy access proposals won support from big asset managers like BlackRock Inc. Currently 85 companies in the S&P 500 have a proxy access proposal pending, according to ISS Voting Analytics.
But some corporate executives and other fund firms such as Fidelity Investments have resisted the idea, concerned it could open up boards too much to disruptive activist investors.
Vanguard, headquartered in Valley Forge, Pa., with $3.4 trillion under management, last year took a middle path on the issue and supported the proposals with the 3 percent standard only in some cases.
Its shift to the lower 3 percent standard this year could make a difference at companies that narrowly defeated the proposals last year, such as at Exxon Mobil Corp.
Vanguard spokeswoman Arianna Stefanoni Sherlock said via e-mail that the change it made "was informed by our engagement with companies and other stakeholders over the past year, as well as the critical mass of access adoption at the 3 percent ownership level by an increasingly wide range of companies."
She added that Vanguard still believes that proxy access rights should only be used by shareholders when they have failed to make progress with companies through simple talks.
In an e-mailed statement, New York City Comptroller Stringer called Vanguard's change "hugely significant."