We've spent a lot of time this week urging the president and Congress to select a tough cop for the Securities and Exchange Commission in the wake of Chairman Harvey Pitt's resignation. But another issue up before the SEC that we don't think should fall by the wayside is the disclosure of mutual fund proxy voting.
As it stands, mutual fund managers have no obligation to reveal to shareholders how they vote on corporate issues. But since the owners of the mutual fund shares are actually the owners of every stock held on their behalf by the fund, this secrecy doesn't make much sense.
While we're not huge mutual fund investors here at the Fool -- beyond index funds -- we are strong proponents of full disclosure across the business spectrum. Mutual fund companies should cast their proxy votes in the interests of their investors, but -- no big surprise here -- that doesn't always happen. A rule change proposed by the SEC would force fund companies to disclose how they vote on key issues, and that, at least, would be a good beginning.
Some 90 million people in the U.S. invest in mutual funds. Here's some background on what's at stake:
You can easily email your comments to the SEC via MutualFundProxyVotes.com.