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…

No Votes on CEO Pay 2018

As You Sow Rosanna Weaver reports on 2018 proxy season no votes on pay: Not all the votes are in, but there are already a significant number low votes and outright losses among the S&P 500 on pay packages. So far there are seven S&P 500 companies that have lost majority votes that I’m aware…

Index funds must use their huge power over companies, says BlackRock chief Larry Fink 

Giant index funds have enormous clout in shareholder votes and company directors underestimate them at their peril, BlackRock chief Larry Fink has warned.The billionaire investment chief said index funds have long been underappreciated by corporate bosses but are making their power known by increasingly threatening to vote against underperforming directors. “The implicit sanction of a…

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…

Institutional Investor’s Wildly Inflammatory Rhetoric About ISS

The wildly inflammatory headline is belied by the actual text, which is sloppily sourced, vague, and internally inconsistent. Michelle Celarier of Institutional Investor calls ISS “The Mysterious Private Company Controlling Corporate America” but then admits that it has produced a “premium research product” that makes recommendations on proxy contests based on the “least invasive solution.”…

Index funds: cut-price consciences

Following criticism, the likes of State Street, Vanguard and BlackRock are changing tack and bulking up governance teams. Listen to the companies themselves and you might think the days of outsourcing voting policy to proxy advisers such as ISS are over. Glenn Booraem, Vanguard’s head of corporate governance, describes his colleagues as “passive investors but…

Charles Elson’s 2018 Proxy Season Predictions

Forbes’ Christopher Skroupa interviewed Charles Elson of the University of Delaware’s John L. Weinberg Center for Corporate Governance about what we can expect in next year’s proxy season: I think you’re going to see a lot more direct involvement between shareholders and directors than before – whether it’s with a non-executive chair of the board,…

Center for Political Accountability: Rise in Mutual Fund Support for Shareholder Resolutions on Political Contributions

The Center for Political Accountability reports that mutual funds are increasing their support for shareholder resolutions calling for companies to disclose information about their political contributions. Support by mutual funds for the Center for Political Accountability’s corporate political disclosure resolution jumped significantly in 2017, to 48 percent from 43 percent in 2016, according to an…

FT: Investors pass the buck on governance VEA: No They Don’t

Rana Foroohar’s column on institutional investors and corporate governance is internally inconsistent and factually wrong. She says that institutional investors “outsource” their proxy votes to the proxy advisory firms. But anyone who understands finance and markets has to recognize that (1) institutional investors rely on a wide range of sources for making all investment decisions,…

Wall Street investors throw their weight in corporate votes – The Globe and Mail

Big investors are losing patience with unresponsive corporate directors, and they’re showing it with their votes.Shareholders have withheld 20 per cent or more of their votes for 102 directors at S&P 500 companies so far this year, the most in seven years, according to ISS Corporate Solutions, a consulting firm specializing in corporate governance. While…

Norway Sovereign Wealth Fund Is Refusing to Be Silenced – Bloomberg

Norway’s $960 billion sovereign wealth fund, the world’s biggest, is taking a stance against equity indexes including companies that aren’t subject to shareholder control. The move opens a new front in the fund’s efforts to use its considerable—and growing—clout to force companies to improve their ESG act. Source: Norway Sovereign Wealth Fund Is Refusing to…