There can be a wide gap between simply offering disclosure and providing it in a way that’s useful to investors. A review of the first round of proxy voting disclosure by mutual fund companies reveals that some companies are doing a much better job of it than others.

As of Aug. 31, fund companies are required to publish their proxy voting record on their Web sites. Investment Executive conducted a brief survey of the efforts of the 10 largest fund companies and a handful of the smaller and mid-sized players from the perspective of the average fund consumer.

In other words: how easy is it to find the information, and how informative is it once you have found it?

It should be noted that every firm IE surveyed did have its proxy voting record available on its Web site. And all firms seemed to fulfil the basic requirements — listing the issues that were voted upon, how they voted and whether their vote was with or against management’s recommendation. That said, there was a good deal of variation in how easy it was to find the information, and how useful it was.

On average, it took more than five clicks to get from the home page of a fund firm’s Web site to actual information about proxy votes. The shortest trip IE took was just three clicks for a couple of companies, and the longest was eight clicks for several others. In some cases, the actual journey was a lot longer than the observed number of clicks because it was not immediately obvious where to look for the information. (The click tally assumes that you guessed right the first time.)

Also, the fewest clicks doesn’t necessarily equate to the most effective disclosure. The firms that required only three clicks delivered disclosure in the form of a downloadable PDF file. Some sites that required longer journeys provided disclosure in searchable form on the site, which means several extra clicks — first to pick the fund you want information on, and then to narrow it down to a specific issuer.

All that being said, the two best examples IE found are sites that require a below-average number of clicks. Franklin Templeton Investments Corp. and RBC Asset Management Inc. , both of Toronto, provide excellent proxy voting disclosure. It takes just four clicks to get to Templeton’s information, vs five for RBC. More important, both sites give clear indications on their home pages where to head for proxy voting information. In Templeton’s case, there’s a link on the home page that directs you to its proxy voting disclosure. For RBC, there’s a link for regulatory information about its funds on the home page, and from there it’s obvious where to find the data.

Other firms providing good home-page access to data are Toronto-based CI Investments Inc. and Saxon Funds Management Ltd. In CI’s case, a drop-down menu on the home page takes you directly to the correct area, and then it’s a few clicks to get to the information. The path to Saxon’s data was also fairly intuitive.

Others were not nearly as easy to figure out. In many cases, it was a matter of guessing where the information might be listed.

One of the least intuitive was the site of Winnipeg-based Investors Group Inc. Click on the link for “mutual funds” on its home page, and proxy voting information is nowhere to be found. After some trial and error, the data can be found under a section labelled “investments.” This is actually one step before from the mutual funds area — even though the mutual funds are the only products required to make this sort of disclosure. The most intuitive link from the home page takes you right past this part of the site.

Once you find your way to the correct part of a site, the results can be quite different, too. Of the 16 fund managers IE looked at, 11 offer online searchable facilities. Four provide disclosure in the form of downloadable PDF files, and one offers it in an Excel spreadsheet.

Within these different approaches, there’s a good deal of variation. Vancouver-based Phillips Hager & North Investment Management Ltd. , for example, offers a large PDF download — three megabytes and 1,400 pages — listing the full voting record of every fund it manages. The other firms IE looked at that use PDFs publish one per fund. And Toronto-based Brandes Investment Partners & Co. breaks it down into even more digestible chunks, listing each fund’s voting by fiscal quarter.

@page_break@The Web sites IE found most useful had searchable facilities, although not all were created equal. What sets RBC and Templeton apart is how easy it is to use their sites once you get there, and the quality of the information they provide.

RBC’s facility, for example, allows searches through its record by fund, by company name, by ticker symbol and by meeting date. It also lists its proxy voting policies, and those of its subadvisors. More important, the information providedabout its votes is useful. It spells out the content of any shareholder proposals that were voted on and lists all directors that were up for election by name.

A number of other sites are not nearly as user-friendly. Not only are they not as easy to navigate and search as RBC’s site but, in some cases, they simply list the management slate of directors as a group, or describe the shareholder proposals that were voted on as “shareholder proposal 1, shareholder proposal 2,” etc. If you want to find out just who was elected, or what the shareholders were proposing, you have to go and dig up the proxy circular itself. Regulators require that funds must maintain a proxy voting record that includes, “a brief identification of the matter or matters to be voted on at the meeting.” Simply listing “shareholder proposal 1” would seem to meet the brevity requirement, but it’s not clear whether that constitutes “identification of the matters to be voted on.”

That is one issue that regulators may want to check when they review compliance with the new requirement. Laurie Gillett, manager of public affairs at the Ontario Securities Commission, says that the OSC’s reviews will look at proxy voting records. But because these records have only been published since the end of August, they “have not yet been reviewed in any detail.” IE