This year the number of climate-related proposals faced by American firms has jumped by more than 40%. Shareholder activism is potent, and likely to intensify
Save time by listening to our audio articles as you multitaskThis reflects investors’ growing and understandable interest in mitigating risks that could threaten a wide variety of firms, such as climate change. It is also a side-effect of gridlock in Washington. Frustrated at the near-impossibility of getting bills through Congress, many activists are seeking change by passing motions ats instead.
This is partly because it has become simpler. The past decade has seen a concentration of voting power among managers of large index funds. Three asset managers—BlackRock, State Street and Vanguard—together own over a fifth of the average company in the500, but wield even greater clout, because only 30% of retail investors bother to vote their shares. So the decision to approve a shareholder resolution often rests with just a few managers and pension trustees overseeing assets owned by millions.
Regardless of the merits of any individual proposal, it is reasonable to be uneasy that such a tiny group of asset managers exerts so much power over America’s companies and, by extension, its economy. Fortunately, there are hints of democratisation. Startups and fintech firms are devising tools to make it easier for retail investors to vote their shares.
Such reforms are technically and legally fraught. Nonetheless, they are necessary. Firms should answer to all their shareholders, not just the well-organised few. Today most investors have little chance to turn ownership into a proportional share of influence. Efforts to make it easier for them to voice their priorities should be welcomed—and accelerated.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Spider-Man Into the Spider-Verse 2 suffers major delaySpider-Man Into the Spider-Verse 2 release date delayed
Read more »
Hong Kong jails pro-democracy activist and former DJ for ‘uttering seditious words’Tam Tak-chi was the first person charged with sedition since 1997 under colonial-era law amid a wider crackdown by authorities
Read more »
Elon Musk could take $43 billion Twitter takeover bid directly to shareholdersElon Musk is considering bypassing Twitter’s board and going directly to the social media company’s shareholders with his $43 billion takeover bid 📱
Read more »
Who is Graham Phillips, the ex-Whitehall civil servant now pushing Russian propaganda?Accused of being a modern-day Lord Haw-Haw, Graham Phillips has been pushing videos denying evidence of war crimes in Ukraine
Read more »