Stewardship Through Proxy Voting with Jerry Bowyer

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I am Rob West. These days our flocks and herds often look like stocks and mutual funds, not sheep and cattle. We're called to why stewardship remains.

One way we do that is through proxy voting. Jerry Boyer joins us to explain how and why it matters. And then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial decisions. Well, Jerry Boyer's a good friend. He's our resident economist. He's also president of Boyer Research, a corporate engagement and proxy consulting firm that executes votes at over 4,000 annual meetings each year. Jerry, great to have you back with us.

Great to be with you. Jerry, proxy voting plays a key role in corporate governance. It, of course, gives shareholders a voice, even if they can't attend meetings. But I guess many Christian investors perhaps don't realize that they have this opportunity to speak into the companies they own.

So why don't we start with the basics? Maybe you can just bring some definition around what is proxy voting. Proxy voting is a lot like citizenship voting. When you're an American citizen, you get to vote in elections, you get to attend town hall meetings and ask questions. And in some states, you can actually put a referendum question on the ballot before all the other voters. Well, all of those rights that you have as citizens, you have very similar rights when you're a shareholder in a company. If you own the shares directly now, if you're invested through a mutual fund or ETF, you basically give that voice to them. So you want to make sure that they're using it properly.

And what we've seen, what I've seen at least, is that most Christians do not know about this. So people who do not share their worldview and are actively hostile to it are really good at gaming the system. They show up, they're super organized, they're pushing pro-abortion things on ballots, they're pushing anti-religious liberty stuff on ballots, they're pushing censorship. But when our side pushes back and tries to promote religious liberty or, hey, what's the risk of selling abortifacients? Isn't it bad for your business to kill future customers?

Or what's the risk of getting so entangled with China? Basically we don't do very well in those votes because Christians don't know that they have that vote power or they've delegated to someone who has exactly the opposite worldview. And what we're finding over and over again, and this is true of Christian ministries, non-profits, even ones that directly have a religious freedom mission, their money is being used to vote exactly the opposite of what they believe in.

Their money is being weaponized against them in their mission. Hmm. Yeah. And part of this, Jerry, is just calling to account these companies keeping the main thing the main thing, staying focused on what they were actually founded to do in terms of their products and services, right?

Absolutely. And part of the corporate engagement that we're involved in is political neutrality corporate engagement. So nobody is coming, at least nobody that we're working with, is coming in there and saying, you know, you really need to start discriminating against gay people. That, you know, that's not the agenda, but we are coming in and saying, you need to stop discriminating against Christians. If you have a pride employee resource group and you don't have any faith-based employee resource groups, or you have faith-based employee resource groups, but not a Christian one, for example, remember talking to a major bank and they said, oh, it's fine.

Don't worry. Uh, we have faith-based groups. I said, really?

Yeah. We have a Muslim one and we have a Jewish one. And I said, sounds like you might be missing one, 75% of Americans. I mean, yes, one half a percent of Americans are Muslim. I'm glad they have an employee resource group.

What about the 75% who are Christians? They just have a blind spot on this. Uh, so, you know, we need to be forceful in getting them to not discriminate against anybody. They need to go back to their main business banking, not social change. We have political parties. We have advocacy groups. We have think tanks. We don't need to turn our corporations into those things, Jerry, just 45 seconds before our first break.

So let's say someone owned shares in XYZ company and they get a form in the mail, or maybe it's online. Well, what does this look like? Yeah. Um, it's a little hard to understand.

They can be 90 or a hundred pages long. If you're getting the actual proxy statement, they're written in sneaky and, um, misleading ways, which is why at boy research, we read them. So we know what's really going on. I would say it is an extremely difficult thing for an ordinary investor to know what to do with this, which is why I think financial advisors need to stop saying, Hey, this is too complicated for me. Okay. Got client. We need to take the box so that the proxy statement goes to you because I don't think financial professionals should be taking the hard work and sloughing it off onto the clients.

Uh, it's too complicated for the advisor when it's too complicated for the client. That's where we stepped in. We can help advisors take back that voice for their clients and vote in a way that aligns with their worldview. A lot more to come on this topic, just around the corner, stay with us. If you enjoy this radio program, you're going to love all of the many different resources waiting for you at faithfi.com and the FaithFi app. You'll find powerful wisdom, free podcasts, articles, videos, and more from leading voices such as Randy Alcorn, Howard Dayton, Ron Blue, and our own Rob West. Grow in wisdom and knowledge by connecting with a community of thousands of Christians striving to be good and faithful stewards at faithfi.com or by downloading the FaithFi app. Are you feeling overwhelmed by credit card debt?

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With me today are resident economist, president of Boyer Research, Jerry Boyer. We're talking proxy voting and corporate engagement. Jerry, would you say it's fair to say this has been an enormous missed opportunity, not only for Christian investors, but for advisors, serving Christians, and major Christian ministries?

Absolutely. A missed opportunity creating a vacuum into which other forces stepped, which do not have the same orientation towards the world that we do and the same moral compass. So we left the vacuum. So instead of influencing things in the right direction, we didn't even leave things at neutral. We basically gave our voice to asset managers or advisors or whatever who either are completely in the opposite direction or simply weren't paying attention, which meant the system, the bureaucratic system of proxy voting sort of kicked in and pushed things in the opposite direction. I know so many Christians who are upset at so many American companies, and we know the names of them, right? And we gripe about them. And I'm thinking, where are you at the annual meeting?

How did you vote when there was a proposal on the ballot? I mean, you're talking about the companies, but you're not talking to them. And I think Christians understand in any other area of life that you don't change people that you talk about. You change people that you talk to. So there's so much opportunity here to go from basically giving our voice to people who are essentially our enemies in terms of worldview to taking it back and then to now going out there and pushing these companies back to where they should be focused on their core business, not on taking one side in a culture war.

Yeah. Jerry, that's changing, though. And I don't know that you'd say this, but I certainly will. Boy, your research has been a big part of why that change is happening. You're really leading the way alongside some major Christian ministries and some really influential advisors that have significant assets under management.

So well done. But are you seeing the tide turn in this? Yes, I am seeing the tide turn, which is really amazing. Because when we help put proposals forward, we generally get very low vote counts because our money is being used against us. And we're still I mean, I think the truth is pretty powerful. So when we come to a corporation about a third of the time, they're persuaded, even though they know that we're going to like 98 percent of the of the votes are going to be cast against us.

And a lot of those will be votes cast by people who are on our side who don't even know that they're voting against us. I remember having a conversation recently with a couple who had just come from Sam Brownback's conference. He's the former ambassador for religious liberty who had been banked by a major bank. And they said the banking is a terrible thing.

And I said, OK, tell me who's managing your money right now. They gave me the name of the asset manager and I took them and I said right here, here's the day that you voted against Sam Brownback. They were shocked by that. They had no idea that that was happening. And I over and over again, anti-Israel votes, anti-sanctity of life votes, pro-life ministries voting with Planned Parenthood, for example, to suppress Crisis Pregnancy Center.

I mean, I'm laughing because it's like so ridiculous. But this sort of thing is happening all the time. And it's because we're not paying attention. And I understand it's complicated.

And if you're running a ministry and you're the CFO, you're not thinking about this stuff, you're thinking about returns or you're an advisor, you're thinking about maybe applying some screens or giving people good counsel. But the time is over for ignorance. We see what's happened. We now know what's happening.

We now have solutions. I don't think that Christian financial professionals and people who are managing money, whether they're asset managers or big foundations or ministries, every church that has a pension plan is voting somehow or another. How are they voting? I've yet to find one that knows how they're voting. When I talk to them, we can come in and say, all right, we'll do an audit and we'll tell you how you're voting. And every single time we do that, they're shocked and they want to do something about it.

And it's not that hard to take back their voice. If you're listening today and you're an advisor who's not stepped into this opportunity and you serve Christians, maybe you're connected to a major Christian ministry, reach out to BoyerResearch.com. Jerry and his team would be happy to get you up to speed on this. Jerry, many listening today on mutual funds or exchange traded funds rather than individual stocks. How does this affect their role in proxy voting?

Well, a couple of things. One, we can tell them how they're voting. I mean, we have the data on all the mutual funds and ETFs, how they're voting. So that's something worth paying attention to. Two, there are products available.

There's something called direct indexing, which a lot of companies offer. And there are Christian aligned offers of that. Several of them who offer that solution where they can come in and take back their vote. If you own the share directly, now you get your vote back.

Now you also need help voting once you get your vote back. So there are definitely solutions. But I'm not going to mention any names, but I think if you think about the big asset managers, they're not on your side for sure. And I know sometimes someone will look and say, well, I've got a faith aligned advisor or whatever, therefore it's OK. And I'm saying, no, not necessarily really very at this point, very few faith aligned advisors are on top of this. They're trying to get on top of it.

But I use Covenant, Trinity, whatever advisors, therefore this is great. And when we run the report, it usually isn't. So this has to be paid attention to. If someone has a fish on the card, doesn't mean that they're voting that way. Chances are they're just depending on the system, it's too complicated, and they're just kind of voting the way the proxy industry, the proxy advisory services say to do, which is not aligned with where we are. Jerry, a lot of the flagship faith based investing asset managers that are in our ecosystem have either moved toward this or they're actively moving toward really a concerted effort in proxy voting and shareholder resolutions, right?

They are. And I'm going to credit you for that and Kingdom Advisors, there's been a lot of attention brought to this. So I pretty much maybe not every last one, but pretty much everyone in our ecosystem is thinking about this now, talking about it, talking to us in many cases, saying, well, how do we do this? So I've been delighted to see the shift towards paying attention to engagement.

I can complain and say, well, the other folks did it 40 years ago, but you know what? What matters is now. So I think the Christian asset managers, the BRI asset managers, principal base, they're really trying to do this. I think it hasn't really entirely caught up with some of the Christian advisors who think if they put on some screens, the job is done, which is you certainly should screen if that's what your client's conscience calls for, but you can't screen out everything, right?

So there's always going to be sin in the portfolio. Now what are you going to do? Are you going to confront it? I think this needs to become the norm among advisors.

Now it is starting to. The conversation is ongoing, but having talked to many of them, it's early days, so maybe clients need to lead on this one. Maybe clients need to keep asking advisors, how am I voting? I think advisors who are really aligned will say, I don't know, but I'm willing to find out and I'm willing to try to get you voting the way you want to. Well, there's no doubt in terms of influence over our culture, Hollywood has a role in that.

Washington has a role in that, but the boardrooms of the biggest companies in America have a major role in that. Jerry, just 30 seconds left, what do you want to leave our listeners with today? I want to leave them with outrage at a distance, raises your blood pressure, but it doesn't do much good otherwise. But actually talking to major American companies, some of them will say, I don't care, I'm not changing anything, but you delivered the message and increasingly more than I expected, and I was the most optimistic person in this movement, they say, okay, tell us what we need to do.

And that is so much more satisfying than griping, being upset and being fearful. A little bit of truth goes a long way. If you're a major ministry that owns shares of stock, you're an advisor or you have an advisor, check out boyerresearch.com and get up to speed. Jerry, thanks for stopping by.

My pleasure. Folks, your calls are next, 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions. Are you looking for a financial professional who shares your Christian values and offers advice you can trust? Certified Kingdom advisors are experienced financial, legal and accounting professionals who have completed a rigorous certification program rooted in biblical financial wisdom. They meet high standards of integrity, competence and stewardship, helping you honor God with all he's entrusted to you.

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More information is available at praxisinvest.com. I'm so glad you're with us today on Faith and Finance, helping you see God as your ultimate treasure. Hey, if you'd like to support Faith and Finance, maybe you've found this show to be a blessing or you've been able to apply something you've heard, we'd like to invite you to become a FaithFi partner. Partners are how, in part, we fund this work as a listener-supported ministry. $35 a month or more is how you partner with us at FaithFi and is our thank you to you. We'll send you resources regularly to equip you in your stewardship journey.

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Just go to faithfi.com and click give at the top of the page. All right, we're going to round out the broadcast today. We'll get to as many questions as we can. Let's go to Mississippi. Julio, how can I help? Hey, boss, how are you doing?

I have a question. I'm 27 years old. I own 20 acres of land and I'm kind of in the process. I'm trying to get as much passive income as possible. The end goal is to kind of put houses down, but as of right now, I have a little bit of money saved that I've kind of acquired through working and other things that I've been able to do.

I wanted to ask you, is this smarter for me to use the land as collateral for me to just get a house put down or would it be better for me to put the money that I have down to kind of get a bigger loan, to build a house, to kind of get more equity in the land, kind of get a bigger value on the property so when I do pull more money out to get more houses, I could have more to my disposal. Yeah. Yeah. Would the money you have saved, would that be part of your emergency fund or is that truly separate from that? No, no, that's just, that's everything I have. Like I'm either going to go in this all the way or I can't. Yeah, I mean, I think that would be my starting point is to say, let's back up and make sure you've got a good, solid financial foundation and that starts with understanding God owns it all and you're a steward, so that's a shift in your perspective and kind of your understanding of money as a tool, not an end, but a means to an end. The second is that you're living within your means. You've got a spending plan, you've got a way to control the flow of money and you've got some surplus at the end of the month. You've got debt under control, so you're not carrying any high interest consumer debt beyond a mortgage or something like that, although I know you don't have one at this point.

And so we've got to put those pieces in place. The next one would be that you've got a good, solid emergency fund of three to six months worth of expenses. So I would start there and any money that would be considered to be used for this purpose, I would not pull in such a way that it prevents you from living within your means or prevents you from staying out of high interest consumer debt or pulls money out of that emergency fund. But as long as that's fully funded and if you have something extra, I would say putting some of that money toward construction on a house does make sense so long as it doesn't deplete your liquid reserves. Because what I wouldn't want is you to put everything into building this house. So now you're cash poor and you've got everything locked up in this illiquid asset of your home and something comes unexpected.

You lose your job, you have something out of left field and now you're really stuck having to take on more debt. Does that all make sense though? Yes, sir. Yes, sir.

Thank you. So what I would probably do is take out either a construction loan or a land equity loan using the 20 acres as collateral. If you have something beyond the emergency fund, I'd love for you to put a down payment toward that construction of maybe 20% of what you're ultimately building.

That would be great, but let's make sure we still have enough in the way of reserves. You get the tax benefits, the interest may be deductible, you use the lands equity without selling it. You just want to make sure that that loan you end up with fits well within your budget.

And I think a good rule of thumb for that would be no more than 25 to 30% of your take home pay toward that principal interest taxes and insurance payment for that home you end up with. And let's not stretch. The big budget busters, there's three of them. It's food, it's transportation and it's housing. It's easier to, the most simple one to kind of right size is if I'm spending too much on food. It's harder to sell a car. It's really hard to sell a house if you buy a home you can't afford.

So especially with the home affordability being such a challenge these days, I would just be careful not to get overextended there and certainly not deplete your reserves. So Julie, I hope that helps you. We appreciate your call today, sir.

Let's go south to Florida. And how can I help? Hi.

Yes, I have. I currently have a Roth IRA for National Life Group and it was opened in 2013. It's past the surrender fee date, but it's not earning me hardly anything. I don't know what to do. I'll be 66 in July and I'm single.

I have no one to depend on, so don't know what to do. Yeah. Do you have other investable assets, Anna, besides this Roth IRA annuity? I have an F&G annuity that's also not... I'm not happy with.

I just don't know what to do. Okay. Yeah. And how much is in that?

Roughly $41,000. Okay. And then in SILAC, I also have, I think that one is $54,000, but they've all...

I'm not... I think one of them has an income rider. Yeah. It's just that I'm losing money every year and I was taking care of my parents. They're gone and now I'm trying to deal with this.

Yeah. Well, and the nice thing is if you put all those together, you've got a nice little nest egg there. I think the key is how do you manage it moving forward so that it's actually growing and it can continue to grow so that when you need it for your expenses, whether that's long-term care or something else, it's there and you can begin to draw on it. I'll tell you, we could talk about how you would invest it yourself and you certainly can do that. But I think connecting with an advisor there in Florida, somebody who could look at all of these accounts and talk to you about how they could be repositioned, perhaps taken out of those insurance companies, especially now that you're beyond the surrender charge period and rolling those out if that's qualified money, maybe to an IRA, consolidating them and then investing them at 66. You might want to think about having a 60-40 portfolio where 60% is in bonds, 40% in stocks. You could even be a little more aggressive than that if you wanted to, but the idea would be you'd take a long-term perspective. Even once you hit retirement, you still need to have this money last for decades potentially. So we still have the ability to have a long time horizon, get it invested so it's growing for you, but it's still liquid.

So if you ever need it, you can pull it out. I'd connect with an advisor there in Florida. Just go to faithfi.com and click Find a Professional. Thanks for your call. Folks, we're so glad to have you along with us today. We covered a lot of ground, but always look forward to being invited into your stories and taking you back to God's Word and helping you consider your financial decisions in light of sound biblical wisdom. I hope you have a great week. Let me say thanks to my team today.

Certainly couldn't do this without them, Jim Henry, Devon Patrick, and Robert Youngblood handling our phones today. Here at Faith and Finance, we want to bring you God's wisdom for managing your financial decisions. You can learn more and listen to our broadcast archives when you head to faithfi.com. In the meantime, may the Lord bless you and we'll see you next time. Bye-bye. Faith and Finance is provided by Faithfi and listeners like you.