By Sheyna Steiner,

On the bankrate website, Sheyna Steiner deals about the next question :
Why your proxy vote matters in proxy season?

“ Proxy season may be winding down, but next year’s voting season will be here sooner than you realize. If you’re at all interested in influencing corporate governance, then learn the ins and outs of proxy voting before your company’s meeting or before next year’s ballots arrive in the spring.

For small-time owners of common stock in companies, it can be easy to discount the importance of participating in corporate governance. Why should management at Exxon Mobil Corp. care about the votes from a shareholder with a measly 100 shares, for instance? But adding your voice to those of other shareholders, big and small, can get attention and influence the decisions of the board of directors, the management and the social and environmental direction of the company.

What is a Proxy? Why Do You Vote It?

Before the annual shareholder meeting, packets of information containing the proxy statement are sent to all shareholders. The proxy statement contains information about the topics to be covered at the annual meeting, including nominations for the board of directors and the pay packages of the top five executives. There are also proposals from management as well as shareholder proposals.

Also included in the mailing is background information on the issues.

The shareholder then fills out the proxy ballot, also known as a voting instruction form, and sends it back.

Alternatively, shareholders can vote by phone or over the Internet.

The various issues up for a vote every year receive different treatment from management. For instance, while the votes for directors on the board are binding, the say on pay vote and those on shareholder resolutions are considered advisory.

For the advisory votes, “there’s nothing legally binding where the company has to make a change. But even if there are just 20% of shareholders who voted in favor of a certain initiative, that’s a lot. When a portion of your shareholders get together in support of an issue, that warrants discussion at least,” says Jessica Clarke, advocate relationship manager at Moxy Vote, a proxy voting research firm.”

The author continue the analyse with the shareholder initiatives and their power over decisions

Shareholder initiatives

“Anyone who owns $2,000 worth of a company’s stock for one year can submit shareholder resolutions to be voted on at the shareholder meeting. Shareholder initiatives span many different environmental, social or governance issues.

Like most investment mailings, proxy voting materials tend to be complex and a little esoteric. In most cases, the nominations for the board of directors are not particularly well-known people, and the other issues up for a vote can also require some research…”

Read the full article on the bankrate website