Do we have an obligation to be as informed as possible when we make a decision?
When a reader we’re calling Sonra’s father died in 2006 at 100, he and his siblings inherited shares of stock in many different companies. “Between that, existing holdings in my wife’s and my IRAs, and trust we set up for grandchildren,” wrote Sonra, “we have holdings in dozens of companies.”
Sonra wrote that while he doesn’t have the time or inclination to read all the annual and semi-annual reports he receives electronically throughout the year, he feels a responsibility to vote for or against company board directors, housekeeping issues and controversial shareholder proposals for those companies.
“To familiarize myself with all the information required to make informed votes would allow little time for more important issues in my life,” he wrote. “I almost always take the easy way out and go with the recommendations of the board of directors, but I don’t feel right about it.”
He supposes he could just not bother to vote at all, but that doesn’t feel right to him either.
“What is the right and responsible thing to do?” asked Sonra.
While Sonra’s decision is specific to individual stocks, it could easily be asked of other decisions we make on a regular basis. On many of the online agreements we sign for apps or software or product purchases or updates, consumers regularly scroll quickly through the small and lengthy type and click off the box indicating agreement without really knowing the specifics of what they’ve agreed to. Sonra is ahead of the game on this front since at least he reads what it is he’s voting on even if he doesn’t read all the supporting material.
In terms of being informed, he’s also ahead of where many investors whose retirement accounts are invested in a variety of mutual funds. It’s a safe guess that many, if not most, investors have little clue about what specific stocks their mutual funds are invested in beyond having an idea of the broad category of investments that are the focus on each fund.
But Sonra’s question is specific to his situation about what is right and responsible to do in voting on issues related to the stocks he owns. I am not an expert in providing financial advice, so for that sort of thing, Sonra should look to someone who is.
I can tell Sonra that what he’s doing strikes me as responsible. From the details he’s provided me, he seems to inform himself with what his stocks are and what issues are being voted on when he votes. Sure, he often takes the recommendations of the board of directors rather than do a deep dive into issues at stake himself. But presumably, he wouldn’t keep his stocks in those companies if he didn’t have faith in leadership.
If there’s a particular issue that arises about which Sonra cares more or if begins to doubt the judgment of some board decisions, he can choose to rely more on research other than his own. But the right thing for Sonra is to continue to be thoughtful about the investments he holds, try to understand the issues he’s voting on when a vote arises, and get on with what he deems to be “the more important issues” in his life.
Jeffrey L. Seglin, author of The Simple Art of Business Etiquette: How to Rise to the Top by Playing Nice, is a senior lecturer in public policy, emeritus, at Harvard's Kennedy School. He is also the administrator of www.jeffreyseglin.com, a blog focused on ethical issues.
Do you have ethical questions that you need to have answered? Send them to jeffreyseglin@gmail.com.
Follow him on Twitter @jseglin
(c) 2024 JEFFREY L. SEGLIN. Distributed by TRIBUNE CONTENT AGENCY, LLC.
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