We often hear that corporate executives believe the pressure to issue quarterly figures and guidance leads to over-emphasis on short-term returns. A new paper by Vikas Agarwal (Georgia State University), Rahul Vashishtha (Duke University), and Mohan Venkatachalam (Duke University) provides some welcome focus on another source of short-term pressure, the reporting requirements imposed on mutual…
Category: institutional investors
The Bogus “Main Street Investors” Group Digs in Deeper
Posted on the Harvard corporate governance blog: A new shareholder advocacy group has been formed, the Main Street Investors Coalition. The Coalition aims to mitigate the adverse effects created by the concentration of shareholder voting power that now resides in the hands of mutual fund advisors. This concentration has developed because of the growing popularity…
Shareholders Bring Gun Safety Issues to the Boardroom
The post-Parkland move to bring the United States to the sensible gun safety rules adopted by other countries has now moved from protests and politics to where the money is, the corporate executives and directors who run the companies that manufacture and sell guns and determine the millions of dollars the NRA spends on political…
A huge pension fund says Facebook is like a ‘dictatorship’ – The Washington Post
VEA Vice Chair Nell Minow is quoted in this Washington Post story about institutional investors challenging Facebook’s dual class structure. Nell Minow, vice chair of the governance consulting firm ValueEdge Advisers, said it is not unusual to see several institutional investors slam a company’s practices — especially if there’s a major governance question at stake….
Asset managers accused of grandstanding on Persimmon pay | Portfolio Adviser
Asset managers who slammed Persimmon pay packages this AGM season have been silent when questioned over their voting record at the UK housebuilder, which enabled executive remuneration to soar.<P><P>At this year’s AGM, held in April, 48.5% of shareholder votes were cast against the pay report, which sees chief executive Jeff Fairburn receive a whopping £75m.<P><P>But…
Investors’ Attention to Corporate Governance by Peter Iliev, Jonathan Kalodimos, Michelle Lowry
Seems like a pretty nuanced cost-benefit analysis to us. We develop a direct measure of investor scrutiny to assess the extent of governance-related research conducted by 97 mutual fund families in 3,706 companies, over a seven-year period. Our governance measure is based on the number of times each investor accesses each firm’s proxy and proxy-related…
BlackRock turns up the pressure on gun makers – Mar. 2, 2018
BlackRock, calling the issue of gun manufacture and sales one of “tremendous urgency,” is engaging with its portfolio companies: It said it has already had “constructive discussions” with some of the companies. It plans to ask gun makers how they’ll deal with the reputation and legal risks associated with manufacturing civilian firearms, and if they…
Chicago Treasurer to Use Portfolio to Promote Sustainability, Fight Climate Change
As New York City sues oil companies and plans to dump investments in fossil fuel production, Chicago Treasurer Kurt Summers is pushing to go even further and use the $7 billion portfolio of the nation’s third-largest city to help fight climate change and promote social progress. Summers is proposing to overhaul the city’s investment strategy…
How are Shareholder Votes and Trades Related?
Rutgers Assistant Professor Sophia Zhengzi writes: Are shareholder votes a sufficient form of voice that catalyzes trades across the board? Are shareholders’ votes and trades correlated? And do shareholders update their trading patterns based on the information conveyed by other investors’ votes? We address these questions by examining the relation between votes and volume at…
At BlackRock, Vanguard and State Street, ‘Engagement’ Has Different Meanings – WSJ
Sarah Krause writes in the WSJ about large institutional investors’ differing views of “engagement,” noting that they also differ on their analysis of particular engagement/activism opportunities. The biggest passive money managers all like to use some version of the word “engage” when describing how they hold their portfolio companies accountable behind the scenes. They differ on…
