Funds News

MOVES-Four Vanguard governance leaders quit, form own firm SGP

BOSTON, Feb 10 (Reuters) - Four former Vanguard executives who spent years overseeing corporate governance as members of the asset manager’s stewardship team have founded their own advisory firm, Sustainable Governance Partners, they said on Monday.

Robert Main, former head of investment stewardship for the Americas and Asia at Vanguard, partnered with Jessica Wirth Strine and Marc Lindsay who were senior directors on the team, and Amy Hernandez, a former team senior analyst, they said in an interview.

The team launched the new firm at the start of what some analysts expect to be a contentious corporate annual meeting season, and underscore investors’ growing attention to proxy votes on issues like CEO pay and climate change.

The executives left Vanguard over the last few months. The Sustainable Governance website went live late last week. Their departures from Vanguard and the launch of their new venture have not been previously reported.

Asked about the impact of the departures, a Vanguard spokeswoman said via email the company was “well-prepared for the upcoming proxy season.” Its stewardship team of about 30 people remains headed by Glenn Booraem, she said.

With some $5.6 trillion under management Vanguard is one of the most influential forces in corporate America, often ranking among the top shareholders in most large companies and a driving force in determining how companies are run.

Sustainable Governance, based in Media, Pennsylvania, not far from Vanguard’s headquarters, aims to advise public corporations with an emphasis on both active and passive shareholders who focus on stock selection and proxy voting. Investors have been increasingly focused on environmental and social criteria like carbon emissions, while governance has already become a widely accepted part of fund management.

The startup joins a growing number of advisory firms including Strategic Governance Advisors and PJT Camberview.

Vanguard had talks with 868 companies during the 12 months ended June 30, 2019 and voted on 169,746 proxy proposals, according to its most recent annual stewardship report.

While closely held Vanguard and its main competitors BlackRock Inc and State Street Corp have faced high-level departures of stewardship leaders in the past, it is unusual for a number of people to leave and form their own firm. [ ] (Reporting by Svea Herbst-Bayliss and Ross Kerber; Editing by Richard Chang)