|The clubby, insular, interlocked world of corporate boards has been a target of attacks for decades. Today, this “inner circle” network finally seems to be passing, with far fewer boardroom connections between companies. Yet the authors suggest we may pay a price for this newly open boardroom—less consensus, and more short-termism and self-dealing.
While major U.S. institutional investors and asset managers have many overlapping goals and interests, their approaches to dealing with the companies they own vary widely. What if the major funds could join together and agree on definitions of their responsibilities, both as corporate investors, and as fiduciaries for their own investors and partners?
These were the motivators driving formation of the new Investor Stewardship Group. It represents some $17 trillion in assets under management, with members including BlackRock, CalSTRS, TIAA Investments, State Street Global Advisors, Vanguard and others. The ISG members have launched the effort with a set of six stewardship principles for institutional investors and six principles for listed U.S. companies.
What are the goals of this new effort, and how should boards respond? We spoke with Anne Sheehan, director of corporate governance at ISG member CalSTRS. as well as Aeisha Mastagni, CalSTRS portfolio manager.