Sky Blog
Large asset managers play an outsized role in the corporate governance of the largest U.S. public firms. The Big Three (BlackRock, Vanguard, and State Street) collectively manage trillions of dollars of assets and own about a fifth of the average …
With (minority) shares now concentrated in the hands of a relatively small number of institutions, institutional investors are expected to play an ever-increasing role in the governance of listed companies worldwide. However, it is uncertain whether institutional investors can actually …
Sign up for an investment account, and you will likely be presented with a dizzying range of investment products. The industry caters to investors with different risk appetites, savings pots, time horizons, ESG outlooks, religious commitments, and more. In some …
On March 7, 2017, the eve of International Women’s Day, State Street Global Advisors initiated its “Fearless Girl” campaign, an effort to increase the number of female directors on the boards of its portfolio companies.[1]According to State Street, …
The tremendous growth of institutional investors, particularly large passive funds, has drawn attention to their role in corporate governance. Major investment advisers such as BlackRock, Vanguard, and State Street are among the largest shareholders in many publicly traded firms and …
Within the world of corporate governance, there has hardly been a more important recent development than the rise of the Big Three asset managers — Vanguard, State Street Global Advisors, and BlackRock. Due to the popularity of index funds and …
What is the effect of stock indexing on information arbitrage and the efficacy of the price discovery process? Forty-five years after John C. Bogle, the Vanguard Group founder, launched the world’s first index mutual fund, and 30 years after the …
“Common Ownership” arises when shareholders hold substantial stakes in different firms that impose externalities on each other, and it challenges the assumption that firms act to maximize their own profits. While firm decisions are ordinarily made by its board of …
The corporation’s role in society is in flux. Previous generations saw government as an important bulwark against corporate harm. Today, by contrast, corporate America is thought to be a solution to government dysfunction around issues like inequality and the environment. …
Last year, major investors took unprecedented steps through engagement efforts and proxy voting to demonstrate their commitment to addressing the climate transition and board and workforce diversity and inclusion, with focus given to disclosure and reporting of key ESG metrics …
Gender diversity in the boardroom and the C-suite is one of the most contentious topics in corporate governance. Proponents of greater diversity argue that the lack of women directors and top executives is a missed opportunity and that increasing their …
Mutual funds and exchange-traded funds are the cornerstone of many Americans’ investment and retirement plans. (For simplicity, we refer to all these investments as “mutual funds.”) Collectively, investment companies such as BlackRock, Fidelity, State Street, and Vanguard hold more than …
Two years ago, the Business Roundtable (BRT) issued a “Statement on the Purpose of a Corporation,” signed by the CEOs of 184 major U.S. corporations, that rejected shareholder primacy, declared “a fundamental commitment to all [corporate] stakeholders” and linked corporate …
American workers are more productive than ever, but they take home the same pay they did 40 years ago. While firms have enjoyed blockbuster profits—and the U.S. gross domestic product has tripled—most American households have not shared in this increasing …
The Big 3 mutual-fund managers (BlackRock, State Street, and Vanguard) have amassed incredibly large public-company holdings through the array of mutual funds they oversee. As a result, they now play a pivotal role in corporate governance in many of the …
Recent developments have placed antitrust law on a collision course with corporate purpose. In a new paper, I reveal the unforeseen negative impacts of this conflict and provide a roadmap for avoiding them.
Businesses and investors are increasingly embracing …
At the World Economic Forum in Davos in January 2020, Larry Fink – the chief executive of the world’s largest asset manager, BlackRock – wore a climate change-themed scarf. It featured the “warming stripes” visual, where the color …
The Big Three passive fund managers (BlackRock, State Street, and Vanguard) have roughly quadrupled their collective ownership stake in S&P 500 companies over the past two decades (Hirst and Bebchuk, 2019). This enormous increase in ownership by passively …
Over the course of 2020, market forces drove corporations and institutional investors to make expansive commitments to their purpose and social responsibility. This fueled companies in many regions to publish lengthy reports under the ESG moniker (Environmental, Social and Governance). …
On December 1, the Nasdaq Stock Market asked the Securities and Exchange Commission (SEC) for authority to adopt new listing rules aimed at increasing board gender and racial diversity. If approved, Nasdaq-listed companies will be required to disclose their board …