Mutual funds own approximately 30 percent of the U.S. equity market, and the Big Three fund families – Blackrock, Vanguard, and State Street – are the largest blockholders in the vast majority of large, publicly traded companies. This has made mutual funds a force to be reckoned with in American corporate governance. Mutual funds tout their active engagement in corporate governance and claim to be “good at it.” But are they?
Traditionally, there are three levers of power in corporate governance: voting, selling, and suing. Selling is not an option for many mutual funds – especially index funds, ETFs, and … Read more
The recent discovery that corporate law litigation very often takes place in courts outside of Delaware has rattled the academic consensus that Delaware won the corporate law “race” by providing a well-managed forum staffed with expert judges willing to decide complex deal cases quickly. In an apparent affront to this settled understanding, recent research shows that more cases are filed against Delaware corporations in other states than in Delaware itself. As a forum for corporate litigation, in other words, Delaware no longer dominates.
Shaken from their settled understandings, commentators have sounded the alarm that fewer cases decided in Delaware … Read more