Wednesday, January 18, 2017

Girls' Club: Corporate Governance at Mutual Funds & Pensions

The New York Times DealB%k reports today on the role women are playing in shaping corporate governance at the largest mutual funds.

 "The corporate governance heads at seven of the 10 largest institutional investors in stocks are now women, according to data compiled by The New York Times. Those investors oversee $14 trillion in assets."  

Mutual and pension funds are some of the largest stock block holders casting crucial votes in director elections and on shareholder resolutions that will span the gamut from environmental policy to political spending to supply chain transparency.  While ISS and other proxy advisory firms have a firm hand shaping proxy votesFN1 (and have released new guidelines for the 2017 proxy season), that $14 trillion in assets are voted at the behest of women is new and noteworthy.  As the spring proxy season approaches-- it's like New York fashion week, for corporate law nerds, but strewn out over months and with less interesting pictures--these asset managers are likely to vote with management. FN2 Still, there is growing consensus that institutional investors' corporate governance leaders are "working quietly behind the scenes to advocate for greater shareholder rights" fighting against dual class stock and fighting for gender equality on corporate boards, to name a few.

I now how a new ambition in life: get invited to the Women in Governance lunch.  

FN1:  See Choi et al, Voting Through Agents: How Mutual Funds Vote on  Director Elections (2011)  

FN2: Gregor Matvos & Michael Ostrovsky, Heterogeneity and Peer Effects in Mutual Fund Voting, 98 J. of Fin. Econ. 90 (2010).

-Anne Tucker

https://lawprofessors.typepad.com/business_law/2017/01/girls-club-corporate-governance-at-mutual-funds-pensions.html

Anne Tucker, Corporate Governance, Current Affairs, Financial Markets, Securities Regulation, Shareholders | Permalink

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