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On Beyond CalPERS: Survey Evidence on the Developing Role of Public Pension Funds in Corporate Governance

40 Pages Posted: 3 Sep 2007 Last revised: 23 Nov 2009

Stephen J. Choi

New York University School of Law

Jill E. Fisch

University of Pennsylvania Law School - Institute for Law and Economics

Abstract

We survey public pension funds and report on their litigation and non-litigation activism. We report that activity levels vary, dramatically. Although some funds engage in a substantial amount of governance activity, a significant number do little or nothing. Public pension funds engage in a very limited spectrum of non-litigation activities, involving primarily low visibility activities such as participation in corporate governance organizations or withholding votes from a management nominee. Funds with more assets under management are far more active in non-litigation activism. Similarly, funds that devote more resources generally to in-house activities are also more active in non-litigation activism. A marked difference exists for litigation activism. Public pension fund participate much more extensively in shareholder litigation than in other governance activities. Despite the importance of asset size for participation levels, we also find that for litigation-related activism, smaller funds participate with equal frequency.

Keywords: institutional investors, pension funds, shareholder activism, corporate governance

JEL Classification: K22

Suggested Citation

Choi, Stephen J. and Fisch, Jill E., On Beyond CalPERS: Survey Evidence on the Developing Role of Public Pension Funds in Corporate Governance. Vanderbilt Law Review, Vol. 61, p. 315, 2008; NYU Law and Economics Research Paper No. 07-30; Fordham Law Legal Studies Research Paper No. 1010330. Available at SSRN: https://ssrn.com/abstract=1010330 or http://dx.doi.org/10.2139/ssrn.1010330

Stephen J. Choi (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Jill E. Fisch

University of Pennsylvania Law School - Institute for Law and Economics ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-746-3454 (Phone)
215-573-2025 (Fax)

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