Patrick Bolton, Tao Li, Enrichetta Ravina, Howard Rosenthal, 30 July 2019

The majority of shares in publicly traded companies in the US are held by institutional investors, who collectively have a large say on the broad objectives of these corporations. This column shows that there is a systematic correlation between the type of institutional investor and their shareholder voting ideology. The two key dimensions of ideology are social responsibility and management discipline.  

Dirk Hackbarth, Alejandro Rivera, Tak-Yuen Wong, 19 December 2018

For decades, academics and practitioners alike have argued that companies do not implement long-term strategies and that shareholders must cure the disease of short-termism to maximise shareholder value. This column examines the perils of short-termism in the context of investment policies and managers’ incentivisation. It finds that shareholder value maximisation for a typical S&P500 firm is not as straightforward as ‘no short-termism’, and depends on firm and investor characteristics.

Ralph De Haas, Daniel Ferreira, Tom Kirchmaier, 24 December 2017

How boards perform their dual role of supervisor and advisor of corporate management is difficult to observe from outside of the company. This column presents a survey of non-executive directors in various emerging markets which reveals substantial variation in the structure and conduct of boards as well as in directors’ perceptions about the local legal environment. Directors who feel adequately empowered by local legislation appear less likely to vote against board proposals, and also form boards that play a stronger role in the company’s strategic decision making. 

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