Our four pillars
Our approach to investment stewardship is based around four pillars of good corporate governance, and focuses on protecting and promoting long-term investment returns for Vanguard-advised funds.
Board composition and effectiveness
We believe that good corporate governance begins with a company’s board of directors. We seek to understand to what extent board members, who are elected to represent the interests of all shareholders, are suitably independent, capable, and experienced to carry out their duties. We also aim to understand how boards assess and enhance their own effectiveness over time.
Board oversight of strategy and risk
We believe that boards should be meaningfully involved in the formation, evolution, and ongoing oversight of strategy. Similarly, we believe that boards should have ongoing oversight of material risks that could impact shareholders and should establish plans to mitigate those risks. We work to understand how boards of directors are involved in strategy formation and evolution, oversee company management and execution of strategy, and identify, govern, and disclose material risks to shareholders’ long-term returns.
Executive remuneration
We believe that sound pay policies and practices linked to long-term relative company performance can drive long-term shareholder returns. We look for companies to provide clear disclosure about their compensation policies and practices, the board’s oversight of these matters, and how the policies and practices are aligned with shareholders’ long-term returns.
Shareholder rights
Shareholders have fundamental rights as company owners. We believe that a well-functioning capital markets system requires that companies have in place governance practices and structures that enable shareholders to exercise those rights.
Engagement practices
Learn more about our approach to engaging with portfolio companies.
Proxy votes cast by the funds
Vanguard discloses proxy votes cast on behalf of all of the Vanguard funds at company shareholder meetings to keep fund investors, regulators, and other stakeholders well-informed, as well as to comply with applicable regulations.