Canada’s mutual funds routinely support corporate management on shareholder proposals, raising questions about voting diligence, says a new survey by the Social Investment Organization of Canada.

The funds voted with management 67% of the time on a carefully-selected set of shareholder proposals chosen to reflect investor opinion on a wide range of issues, it said. The study looked at shareholder proposals on corporate governance matters, social and environmental issues.

“The shareholder proposals selected for this study represent a sample of the most carefully-selected proposals, and represent issues of broad interest to the investing public. The fact that fund companies routinely vote with management and against these proposals is a testament to the fact that Canadian mutual fund companies could do much more in fulfilling their proxy voting obligations to their investors,” it said.

The report recommends the fund industry strengthen its proxy voting guidelines, change its pro-management philosophy on proxy voting issues, and better communicate the importance of proxy voting to fund managers.

It also recommends a number of public policy changes, including full disclosure of proxy voting guidelines, improved compliance with existing disclosure rules and standardized reporting of proxy voting records.