Bob Iger won the Nelson Peltz-driven challenge to his catastrophic, personal-politics-over-corporate-success mismanagement of The Walt Disney Company last week. Peltz, an activist investor, told the truth about Iger’s reign, and would have brought the Iger-independent voices on the board to one. Iger seemed aware that his failures and breaches of duty were so massive that even one truth-teller on the board would finish him, so he and his squad went to extraordinary lengths to defeat Peltz.

Scott Shepard

If, that is, he genuinely lost the vote.

To be perfectly clear: this is not an accusation of anything at all. Just some wandering wonderings – but with reason to wonder. Disney usually releases annual-meeting vote results the next day. This year, nothing after a full week. If the contested seat vote was terribly close, how was Disney able to declare victory – not only at the meeting, but by leak in advance? And if the vote wasn’t terribly close, why the highly irregular week’s delay. [The vote totals were reported shortly after this piece was sent to RealClearMarkets. The still inexplicably vey late arrival of the totals doesn’t alter any of the analysis within, but it seemed sporting to mention that they had finally arrived.]

For that matter, when shareholders vote, the votes go to a company called Broadridge that somehow controls nearly all the voting pipes. Who makes sure the votes are properly tallied, that there’s no funny business or missed boxes? The same few accounting firms certify the results, but just what are they certifying? And while we’re at it, why does one single private company control those voting “pipes?” Isn’t that a monopoly over what looks like the modern equivalent of the old Ma Bell telephone wires for this niche bit of the world?

The law here is clear: either Broadridge must be regulated as a common carrier, or it must be broken up. The latter hasn’t happened; Broadridge holds materially all the pipes. And Broadridge definitely isn’t overseen – or behave – like a common carrier. The program I direct tried to do some business with a couple years ago and were treated like … independent thought at a Disney board meeting once our negotiating “partner” discovered that we weren’t left-ESG, but favored getting businesses back to business. Haters!

“Wait,” I pretend I can hear you saying so I can shift focus away from myself and back to you, my putative reader. “Wut?” (I should give you better lines, McGuffin. Sorry.)

That’s right, imaginary friend. Broadridge has, by general consent, a definite stake in the game. Just like the Big 3 investment houses – about which more anon – Broadridge has picked a side, and its pro-left-ESG. While nothing here is, to repeat, an accusation of anything, it’s plain that if  a single entity controls most all funnels through which the votes pour, and that entity has little oversight, it would terrific if at least the entity not have a partisan position on the very controversy most often cleaving highly contentious votes – ESG or not SG. (Sorry.) Again, with no accusations express, implied or even wafting gently in the spring breeze, the appearance of the thing begins to look a lot like Chicago – a metaphor even more apt when it is remembered that uni-control Chicago is surrounded by uni-Control (these days, anyway) Illinois. No checks and balances even between levels there.

Likewise, here, the same appearance of a systemic problem gloams, because not only the pipes are in the hands of committed left-ESGers, but so are the votes – and, to be clear, other people’s votes. The biggest voters, the Big 3 of BlackRock, State Street and Vanguard, are also firmly committed to the left-ESG Potemkin promised land – voting not their own shares, but shares owned by other people – in line with those left-ESG goals with varying degrees of partisan consistency. (In other words, some are more hardcore left ESG, but as far as is known they have voted (within a rounding error) for no – none, nada, zip – no environmental or social proposals arising from a non-left-ESG worldview or set of interests and priorities.

Goose egg. That’s pretty committed, and pretty partisan. When the country started to get wise to this bizarre, uniform partisan commitment powered by other people’s capital, the Big 3 started aggressively pretending that ESG isn’t left-partisan, but that’s farcical nonsense; as everyone now knows, the two prime ESG goals are the same as the two prime Biden Administration whole-of-government initiatives. Only Sunny Hostin, babbling gently to herself about how smelly cows in Nebraska caused the moon to pass in front of the sun for a bit, can be thought to take buy that cow-creation. (I would say “and her ilk,” but I reckon – and pray – that Sunny is one of a kind.) Now they’re starting to pretend they’re not even pro-ESG anymore, but they can’t manage it for long.

To complete the picture, getting back to Disney, we have a company being run into the ground by Bob Iger exactly because he’s so slaveringly committed to ESG goals at their most off-putting, value destroying and absurd.

Every party all along the line takes the same stance on the central issue facing shareholder – in general and in the Peltz vote.

If one were designing a system to appear more untrustworthy than this one, and to seem to leave more opportunities for skullduggeries, what else could he possibly add?