Empowering Shareholders Act of 2026

Key Points

• This bill changes how large investment advisers vote on behalf of people who own passively managed index funds. Instead of the fund manager deciding how to vote on major corporate issues, the actual investors get to choose.
• Investors would have four options for non-routine votes: give specific instructions (including picking a published voting policy), follow what the company's board recommends, abstain while still counting toward quorum, or have their vote mirror what other shareholders choose.
• The new rules only apply to non-routine matters. Routine matters like board elections, management pay, auditor selection, and board declassification are excluded, meaning fund managers can still vote on those without asking investors.
• Investment advisers get a legal safe harbor protecting them from lawsuits as long as they follow the rules, whether they vote per investor instructions, follow board recommendations, abstain, or mirror other shareholders' votes.
• Published voting policies used by passively managed funds are restricted from seeking to set company strategy, submitting shareholder proposals, nominating directors, or coordinating votes with other index managers. This limits the influence large fund managers can exercise over corporations.
• The law would take effect one year after enactment, giving investment advisers time to build systems that let investors choose their voting preferences, including through websites and mobile apps.