The power to make change may lie in your financial rights rather than just your vote. While many politically active citizens focus on exercising their political rights through voting and activism, few are aware of the financial rights they possess as participants in retirement and benefit plans, mutual and exchange-traded funds, and shareholders. These financial rights grant individuals the ability to influence corporate decisions that can impact society, the economy, and their own livelihoods. By utilizing these rights, citizens can address societal issues such as climate change, economic inequality, and polarization in a potentially more effective way.
Fiduciaries, such as retirement fund trustees and investment management firms, play a crucial role in helping individuals exercise their financial rights. Fiduciaries are obligated to act in the best interests of their clients, putting their clients’ interests ahead of their own and investing money prudently. With control over a significant portion of stock in U.S. public corporations, fiduciaries have the power to influence corporate behavior through voting on resolutions, engaging with companies, and withholding financial support from companies that pose systemic risks.
Systemic risks, such as climate change and economic inequality, have the potential to significantly impact investment portfolios. Fiduciaries have a duty to mitigate these risks on behalf of their clients by investing wisely and engaging with companies to address these issues. By taking actions such as urging companies to reduce methane emissions or supporting workers’ collective bargaining rights, fiduciaries can help reduce systemic risks and protect their clients’ investments from significant declines.
Individuals can take steps to ensure that their fiduciaries are addressing systemic risks by actively engaging with their investment providers. By calling fund companies or plan sponsors to inquire about the steps being taken to protect investments from systemic risks, individuals can hold their fiduciaries accountable and contribute to positive change. Writing letters to express concerns about how systemic risks are being addressed can also help raise awareness and prompt action from fiduciaries.
The citizen stockholder movement encourages individuals to recognize and utilize their financial rights as a means of affecting change. By engaging with their fiduciaries and advocating for responsible investment practices, citizens can make a positive impact on corporate behavior and contribute to a more sustainable and equitable society. By leveraging their financial power in addition to their political rights, individuals can work towards addressing pressing societal issues and protecting their own financial futures.
