ESG, Corporate Governance & Future of the Firm

ESG Investing Isn’t as Divisive as We Think

Many asset managers have stopped offering funds supporting environmental, social, and governance (ESG) goals in the face of political backlash. In new research, Omar Vasquez Duque shows that much of this backlash is due to semantics and poor fund design, and that investors across the political spectrum are willing to take lower financial returns to support specific goals under the ESG label.

How Regulatory Shifts Have Reshaped ESG Voting Patterns

In 2021, a regulatory shift by the United States Securities and Exchange Commission expanded shareholder proposals on environment and social issues from mere company...

How Proxy Voting Policies Fail To Reflect Investor Ideologies

Large asset managers increasingly control voting rights on behalf of investors, raising questions about ideological alignment in corporate governance. Pablo Montagnes, Zac Peskowitz, and...

Creating a Robust Economy Requires a Corporate-Governance Policy Response

William Lazonick writes that recent United States industrial policy initiatives miss the centrality of corporate resource allocation for creating a robust economy, characterized by...

The Corporation in the 21st Century

The following is an excerpt from John Kay's new book,“The Corporation in the 21st Century,” now out at Yale University Press. It is neither necessary nor sufficient...

Tracking SEC Movements Sheds Light on Investigatory Process and Its Impact on Firms

In new research, William Christopher Gerken, Steven Irlbeck, Marcus Painter and Guangli Zhang track the movements of Securities and Exchange Commission-associated smartphone devices to shed light on the SEC’s investigatory process and understand how office visits from its staff alter firm behavior and outcomes.

Can Shareholder Democracy Fill the Void of a Dysfunctional Regulatory System?

As financial markets take on societal challenges like climate change, new research from Robin Döttling, Doron Levit, Nadya Malenko and Magdalena Rola-Janicka explores how shareholder democracy interacts with the political process to impact public goods provisions. The authors investigate the potential of investor-driven governance to supplement the shortfalls of the regulatory system, highlighting both benefits and risks posed by wealth inequality and ESG backlash.

The Politicization of Social Responsibility

Todd A. Gormley, Manish Jha and Meng Wang examine the impact of state-level political dynamics on the support institutional investors provide to socially responsible investing (SRI) proposals. The findings reveal that investors are less likely to support SRI initiatives at firms headquartered in Republican-led states, suggesting that regional political pressures are shaping corporate social responsibility trends.

Reclaiming Corporate Democracy

The following is an excerpt from Sarah C. Haan’s book, “Reclaiming Corporate Democracy.”

Proxy Voting’s Hidden Influence on Corporate Takeovers and Activist Campaigns

Roslyn Layton writes that proxy advisors, which provide voting services for shareholder meetings, can influence how publicly traded firms conduct their business. Two proxy firms–Glass Lewis and Institutional Shareholder Services (ISS)–have 97 percent of the market and have allowed some minority shareholders to exercise outsized influence.

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