Voting with Your Money: From Profit to Purpose

This post challenges the long-standing belief that investors care only about financial returns. For decades, capital markets were guided by the doctrine of shareholder value maximization, assuming that profit was the sole objective of anyone holding equity. Yet changing societal expectations –particularly among younger generations – reveal a different reality: many investors want their money to reflect their values, not just generate income.

Building on the framework proposed by economists Oliver Hart and Luigi Zingales, the post argues for a shift from maximizing shareholder value to maximizing shareholder welfare, meaning that ethical and social preferences should be considered alongside financial ones. Despite this shift in mindset, most investors are still unable to act on their convictions. Proxy voting remains concentrated in the hands of institutional intermediaries such as pension funds and asset managers, who continue to vote primarily on the basis of returns.

To close this gap, new models are emerging across global markets. Direct voting programs give individuals control over how their shares are voted. Value-based voting policies allow investors to choose predefined proxy strategies that reflect their priorities. Mission-driven funds align both capital allocation and voting behavior with stated values. These innovations redefine money not just as capital but as a form of democratic expression – a way to vote through investment.

This is not a rejection of profit. It is an expansion of investor freedom, turning sustainability into a matter of choice rather than constraint.

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