The future of corporate stewardship – and therefore corporate governance – rests in the hands of a few large institutional investors.[1] Questions of whether these funds have the necessary incentives to pursue stewardship have set off an explosion of research by both legal scholars and economists alike. Some say that funds lack even the basic incentives to vote on value-enhancing corporate governance matters because, while even large benefits diffuse among investors, funds bear the totality of the upfront costs.[2] Others argue that funds – through their common ownership of nearly all public companies – have perverse incentives to … Read more