Our four principles

Vanguard’s investment stewardship activities are grounded in four principles of good corporate governance.

Good governance starts with a company’s board of directors image

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 shareholder value. 

Importance of governance structures that empower shareholders and ensure accountability of the board and management image
Sound, performance-linked compensation programs drive long-term value. image

Executive compensation

 

Sound, performance-linked compensation programs drive long-term value.

 

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 shareholder value.

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.

Shareholders should be empowered image