As reported at The Corporate Counsel earlier this week, SEC Commissioner Luis Aguilar has recently lamented the fact that there was a sharp decrease last year in the number of retail investors who voted their proxies. The drop is attributed to the new e-proxy rules. Apparently, most retail shareholders are less likely to participate in the voting process if they get their materials via e-proxy as opposed to the mail. And, when they do vote using e-proxy, a substantial amount do not click on the proxy statements and annual reports posted online.

Electronic voting has allowed us to confirm that a large portion of shareholders do not read proxy materials, even when they vote. The SEC calls this troubling, but the reality is that retail shareholders rely on institutional investors to police the companies in which they invest.