A portfolio manager's proxy voting policy requires voting proxies only when there is a cost benefit to the client. If two proxies are on the table—Barnikoff and Matric—which voting action would least likely violate CFA Institute Standard III(A) Loyalty, Prudence, and Care?

A portfolio manager's proxy voting policy requires voting proxies only when there is a cost benefit to the client. If two proxies are on the table—Barnikoff and Matric—which voting action would least likely violate CFA Institute Standard III(A) Loyalty, Prudence, and Care?

• A. Vote the Barnikoff proxy only
• B. Vote neither proxy
• C. Vote both proxies
• D. Vote the Matric proxy only

Answer: (D)

The key idea is acting with loyalty, prudence, and care by voting only when there is a net benefit to the client after considering any costs. The manager’s policy says proxies should be voted only if doing so brings a real cost-benefit to the client. Between the two proxies, only the Matric proxy provides a clear net benefit to the client, given the policy. Voting for Matric aligns with the aim of using client resources wisely: you exercise the voting right where it can make a meaningful positive difference for the client, without incurring unnecessary votes or costs for the Barnikoff proposal that doesn’t offer a material benefit. Voting both would add unnecessary effort and potential conflicts without clear additional client value. Voting neither would ignore a known positive opportunity from Matric. Voting the Barnikoff proxy only would expose the client to a vote that lacks demonstrated benefit and adds unnecessary cost. So, casting a vote for the Matric proxy only best follows the policy and the fiduciary duties to the client.

The key idea is acting with loyalty, prudence, and care by voting only when there is a net benefit to the client after considering any costs. The manager’s policy says proxies should be voted only if doing so brings a real cost-benefit to the client.

Between the two proxies, only the Matric proxy provides a clear net benefit to the client, given the policy. Voting for Matric aligns with the aim of using client resources wisely: you exercise the voting right where it can make a meaningful positive difference for the client, without incurring unnecessary votes or costs for the Barnikoff proposal that doesn’t offer a material benefit. Voting both would add unnecessary effort and potential conflicts without clear additional client value. Voting neither would ignore a known positive opportunity from Matric. Voting the Barnikoff proxy only would expose the client to a vote that lacks demonstrated benefit and adds unnecessary cost.

So, casting a vote for the Matric proxy only best follows the policy and the fiduciary duties to the client.