Our views on corporate governance
Good governance matters
Our approach to investment stewardship is based around four pillars, focusing on long-term investment returns for Vanguard-advised funds.
Our four pillars
Vanguard’s investment stewardship activities are grounded in four pillars of corporate governance.
Board composition and effectiveness
Good governance begins with a company’s board of directors.
Our primary focus is ensuring individuals who serve as board members are independent, capable, and appropriately experienced.
Oversight of strategy and risk
Boards should work to prevent risks from becoming governance failures.
When we discuss strategy and risk with portfolio companies, we do so to understand how the board of directors oversees the strategy and identifies and governs material risks to long-term investment returns.
Executive compensation
Sound, performance-linked compensation programs drive long-term returns.
We look for companies to provide clear disclosure about their compensation practices, the board's oversight of those practices, and how they are aligned with long-term investment returns.
Shareholder rights
Shareholders should be empowered.
We believe that a well-functioning capital markets system requires that companies have in place governance structures that safeguard and support foundational rights for shareholders.
