The Role of Long-Term Shareholder Voice

From Benjamin Colton, Global Head of Asset Stewardship, and Ryan Nowicki, Assistant Vice President of Asset Stewardship at State Street Global Advisors.

As a long-term investor, representing quasi-permanent capital for companies held in our clients’ index portfolios, we are uniquely positioned and incentivized to encourage portfolio companies to consider long-term risks and opportunities in order to maximize long-term value for our clients.With many portfolio companies improving their shareholder engagement practices and approach to long-term financially material issues, our support for incumbent directors in contested elections has steadily increased over the last five years, reaching a new high in 2022.Some activist shareholders, companies, and policymakers are engaging in and/or proposing activities that can circumvent shareholder voice; such measures could result in capital markets characterized by a focus on short-termism, amplifying the influence of certain investors and stakeholders, often with limited investment time horizons.Boards and management teams that focus on managing material risks and emerging opportunities can maximize value for both companies and their diverse shareholder bases, thereby bridging the gap between short and long-term interests.

The Role of Long-Term Shareholder Voice

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