If a cost-benefit analysis shows voting all proxies may not benefit the client, what should the manager do?

• A. Vote all proxies anyway
• B. Vote only those with obvious benefit
• C. Vote none of the proxies
• D. Disclose policy to clients and apply it where beneficial

Answer: (D)

Proxy voting should align with clients’ interests and be guided by a clear, disclosed policy. When a cost-benefit analysis shows that voting all proxies may not benefit the client, the manager should disclose the voting policy to clients and apply it where beneficial. This preserves fiduciary duties by being transparent about how votes will be cast and by focusing voting decisions on situations with net benefit, rather than voting automatically or abstaining altogether. Voting all proxies ignores the client’s interests; voting none neglects the right to vote; voting only those with obvious benefit relies on ad hoc judgment without a defined framework.