If you invest in a public company, ETF, or mutual fund, owning shares typically gives you the right to vote on matters pertaining to the company or fund. But you don’t actually need to be in the boardroom to exercise that right. 

Funds and public companies hold shareholder meetings annually. You can show up in person to vote on corporate matters such as who should join the company’s board, as well as executive salaries, director appointments, and more.

Or you can register what’s known as a proxy vote. A proxy vote is a way for you to vote without actually attending the meeting, essentially authorizing a manager of the company to register your voting instructions. Shareholders frequently vote by proxy, especially now that Covid-19 has temporarily suspended in-person meetings.

Shareholders who are eligible to vote on issues will receive proxy documents ahead of the company’s annual meeting, detailing what issues are up for a vote. They can then vote on resolutions in the proxy document online, by phone, or through the mail. 

Who can vote on company issues?

If you own one whole share of a company’s stock, you typically have the right to vote on issues related to that company as long as you are registered as a shareholder by something called the company’s record date. The record date is the official date by which you must be registered as a shareholder to participate in a company’s annual meeting.

For each share that you own in a company, you have one vote. So the more shares you own, the more of a say you can potentially have in the company’s future. 

You might own fractional shares, or pieces of whole shares in a company through an app like Stash. Once you own a full share in a company, you are generally entitled to voting rights for that investment.

What might shareholders vote on?

When you receive a proxy document from a company, it might include a number of different issues to vote on, including elections to the board of directors or proposals from other shareholders. Shareholders might also vote on corporate actions, such as mergers or acquisitions. 

Typically, shareholders can choose to vote for or against an issue. They may also choose to abstain or withhold their votes. Choosing to withhold or abstain from voting can affect the election of a director, depending on various factors, such as whether a candidate needs a plurality or majority to win an election, and whether someone is running unopposed. 

Good to know: Investors who own at least $2,000 worth of stock in a company can file a proposal for a particular issue to be included in a proxy vote with the Securities and Exchange Commission (SEC), as long as they’ve been invested in that company for at least three years.

If you’re an investor who has voting rights in a company, you can have a say on who runs that company and how they do it. So make sure you keep an eye out for proxy documents and submit them.