The Social Investment Forum Foundation (SIFF) recently released the results of a study on how mutual funds are supporting improved corporate governance. Whether you're a fan of socially responsible investing (SRI) or not, the results are important. They reflect, after all, support for things that most Fools would want, such as improved concern for the financial well-being of shareholders of public companies.

Socially responsible mutual funds were found to be much more likely than conventional funds to support shareholder resolutions focused on corporate governance, such as those in favor of expensing stock options, those against golden parachutes (i.e. rewarding departing executives), and those objecting to members of the board of directors. The study found that "socially responsible investing (SRI) funds as a category support more shareholder-proposed corporate governance resolutions and 'vote no' campaigns than their conventional peers by a 2-to-1 margin. They also tend to support more controversial governance resolutions, like separating the CEO and chair positions, or limiting non-audit services by auditors."

More findings:

  • Regarding shareholder proposals related to social issues or the environment, SRI funds, on average, supported them 85% of the time, vs. 15% for conventional funds. The conventional Schwab (NYSE:SCH) fund family was singled out as an exception, supporting social resolutions 56% of the time.

  • The conventional fund families that had the strongest records of supporting governance proposals include Citigroup Asset Management (whose parent is Citigroup (NYSE:C)), Dreyfus, Franklin Templeton (whose parent is Franklin Resources (NYSE:BEN)), Merrill Lynch (NYSE:MER), and Schwab.

  • Conventional and SRI fund families found common ground on the issue of declassifying boards and holding annual elections. Support topped 85% in both camps.

This study was enabled by a recent rule requiring mutual funds to disclose how managers voted on proxy issues. Ironically, the rule was enacted against the wishes of much of the mutual fund industry -- which shows how eager many funds are to be up front and open with shareholders.

Tracey Rembert, author of the study, noted, "Clearly, our results show that this disclosure rule is very important in prodding fund companies to uphold their fiduciary allegiance to fund investors. Already, we've seen improvements in policies and voting guidelines that benefit individual fund owners looking for this information. With a new spotlight on fund voting, we should see improvements in the years to come of funds standing up to management more often when it's in the interest of their fundholders."

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Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.