Vivek Ramaswamy, who seems to spend so much time warning the press and political audiences about “woke” investors that we wonder how much is left to actually run, much less market, his “anti-woke” fund, now has started a new business, an anti-woke proxy advisory service.
We have a couple of comments. First, great! This proves our point made in several comment letters to the SEC that there are no barriers to entry when it comes to setting up a proxy advisory service and therefore no need to regulate them. Great part two! We love to see the free market vibrant and competitive. Next: Not sure how much due diligence went into this, or maybe Peter Thiel is funding it like he did Strive and the now-defunct anti-woke bank so money is no object, but perhaps Ramaswamy should take a look at what happened to the last anti-woke proxy advisory service, Proxy Governance, founded by a former SEC Commissioner and funded by the Business Roundtable, failed. Their product was actually excellent. But they never escaped the credibility problem of their connection to corporate executives. What was left of Proxy Governance was bought by ISS.
VEA’s Chair and Vice Chair founded ISS in 1985 and left in 1989 and 1990, long before it was as influential as it is today. We are very well aware of what goes into starting and marketing a proxy advisory service. It’s not easy, but it is doable. It is a great job but it is a full-time job, though, so we hope Ramaswamy gives it the attention it deserves. We wish him all the best.
Strive Asset Management, a vocal critic of ESG investing, launched a proxy voting advisory and consulting arm as an alternative to incumbents ISS and Glass Lewis. The activist investor claims that Strive Proxy Voting will be the only strictly pro-fiduciary proxy service, suggesting that others are advancing “progressive social and political agendas.”
ISS and Glass Lewis control 97% of the market for voting advice, which Vivek Ramaswamy, co-founder and executive chairman of Strive, said “is a big reason why you see politicized policies being advanced in corporate America’s boardrooms – because of the conformity of following ISS and Glass Lewis recommendations generally, both of whom have been very closely tied to an environmental and social agenda that finds its way into many proxy votes.”Teneo U.S. ESG Roundup 1.19.23 | Teneo