Corporate Governance

Corporate governance has become increasingly politicized in recent years, with very real consequences for investors and financial institutions of all kinds. From a looming funding crisis facing the nation’s public pension system to the emergence of quasi-regulators operating with unchecked powers and limited scrutiny, there has been increased focus on politically motivated investments, often at the expense of traditional fiduciary responsibility aimed at maximizing returns.

News

The Proxy Protection Racket

Studies have found that the two firms can swing 20% of votes in proxy elections. An American Council for Capital Formation review last year found that 175 asset managers with $5 trillion of assets voted with ISS recommendations 95% of the time. Activist hedge-fund investors often enlist the proxy firms to shake up management, for better or worse.

Proxy Firms’ Independence Is Undermined by Their Own Shadow Reports

Proxy advisory firms have come under increasing scrutiny in recent months for the disproportionate influence they have over shareholder votes at America’s public companies....

CalPERS can’t afford to put social strategy above returns

L.A. Daily News
a 2016 report by the American Council for Capital Formation found that “environmental-related investments comprised four of its nine worst performing private equity funds last year, accounting for more than $600 million in committed capital.” Focusing on ethereal matters makes it harder for CalPERS to dig out of its hole, something that’s essential even though taxpayers are the ultimate backers of all California public pensions.

Research & Publications

The Realities of Robo-Voting

ACCF Report Finds Numerous Asset Managers Voting in Lockstep with Proxy Advisor Recommendations

Are Proxy Advisors Really a Problem?

ACCF-commissioned research confirms alarming practice of robo-voting is real and quantifies scale of proxy advisor errors

Ratings That Don’t Rate: The Subjective World of ESG Ratings Agencies

EXECUTIVE SUMMARY As the trend of Environmental, Social, and Governance (“ESG”)1 investing has risen, so too has the influence and relative importance of ESG rating...