Dear Thinker:

Below are two letters to the editor in response to a recent op-ed in the Wall Street Journal about the folly of investment funds taking into consideration political and social issues in their investment decisions.

The first letter is from the president and CEO of Boston-based State Street Global Advisors. In disagreeing with the op-ed, he speaks in bureauclese, buzzwords, platitudes, and banalities--just like most leaders in business, media and politics speak today, without seeing how ridiculous and programmed they come across.   

The second letter is from an unknown guy in Houston who sees through the corporate gobbledygook.  He speaks clearly and cuts to the chase about what's going on.

Perhaps the election of Trump shows that people are getting fed up with the former and prefer the latter.

Cheers,

Mencken's Ghost...

The Wall Street Journal, July 23, 2018 10:57 a.m. ET

Phil Gramm and Mike Solon's "Keep Politics Out of the Boardroom" (op-ed, July 19) criticizing the role of large index managers misrepresents State Street Global Advisors' core investment mission. We engage with companies not to force arbitrary political or social "values" on them, but rather to promote long-term value for millions of investors saving for the future in a world that has become increasingly obsessed with the short term. Unlike our active strategies, where we can sell a company when we disagree with management, in our index-based strategies we represent quasi-permanent capital. Our fiduciary obligation is to maximize the probability of attractive long-term returns for those who invest with us.

We have created a strategic engagement program that raises material issues with boards, including ESG concerns that might impact companies' ability to generate sustainable returns. We carefully select the issues, based on rigorous research identifying their materiality for investment performance. We seek maximum transparency around our views, the research underpinning them and our voting intentions through our thought leadership and conversations with both boards and our clients, who are demanding greater clarity around these issues.

While we will use the analytics provided by proxy advisers, we never outsource our proxy voting decisions. Far from injecting politics into boardrooms, we believe our focus on active stewardship and long-term value in a rapidly changing world is more important than ever for ensuring healthy public markets, resilient economic growth and shared prosperity. This is the future of long-term investing.

Cyrus Taraporevala

President and CEO

State Street Global Advisors

Boston

Vanguard has developed something called an Investment Stewardship program. The program brochure goes to great lengths to highlight Vanguard's advocacy for trendy issues such as board gender targets, board diversity targets, sustainability reporting and climate risks. Traditional concerns, such as executive pay, board experience, conflicts of interest and unequal voting-share classes, are included but not highlighted.

Vanguard seems to be seeking to immunize itself against curious regulators and others looking at legal issues surrounding its proxy voting by signing up with nonprofit and nongovernmental organizations to allow it to prominently display their logos.

All the Vanguard material reminds me of an article in Foreign Policy from Feb. 21 of last year: "Saving the World, One Meaningless Buzzword at a Time," about how the corporate world has turned human rights into a theater of meaningless programs, conventions, meetings and training courses.

Stephen Weeks

Houston