House Financial Services Committee Chairman Barney Frank (D-Mass.) is considering a bill that would require mutual funds, pension plans and other large institutional investors to publicly reveal how they vote their proxies, to impose proper corporate governance on otherwise passive investors who, seemingly, don't vote in the fiduciary interest of their end investors.

“If you are the owner of shares, you have a privacy right,” Frank said at a hearing on financial services compensation. “But if you own shares on behalf of a fiduciary, you will need to disclose how you vote.”

Although many pension plans disclose their voting guidelines, they are not legally required to disclose how they vote their proxies. In late 2003, the Securities and Exchange Commission passed a measure requiring mutual fund companies to file an annual SEC listing of their proxy votes every August.

Vanguard founder and former Chief Executive Officer John Bogle called on the mutual fund industry in a Wall Street Journal editorial last week to stand up for shareholders’ long-term benefit by holding companies up to higher standards.

Corporate Library Research Associate Beth Young told MarketWatch that a uniform law would hold mutual funds and other large investors up to a higher, more uniform standard: “At a minimum, it pushes investment managers to look at their proxy-voting process and what they need to do to insulate themselves from corporate or labor conflicts of interests. By requiring public disclosure of votes, investment managers will think more about whether they have the information and staff to act as a fiduciary for the people they are voting on behalf.”