Fiduciaries Voting Proxies | CFA® Level 1 Exam Preparation

Fiduciaries Voting Proxies

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Question

Fiduciaries are obligated to vote proxies:

Answers

A. none of these answers.

B. on an "as needed" basis, depending on the issue at hand.

C. only when there is a nonroutine governance issue.

D. only when there is a change in firm capitalization.

E. in an informed and responsible manner.

F. only when management requests the fiduciary to vote, in writing.

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Explanations

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A. B. C. D. E. F.

As part of a fiduciary's duty of loyalty, they are obligated to vote proxies in an informed and responsible manner. A fiduciary who fails to vote, casts a vote without considering the impact of the question or votes blindly with management on nongovernance issues may violate this duty of loyalty.

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