Delegated Activism and Disclosure

43 Pages Posted: 3 Aug 2010 Last revised: 7 Mar 2012

See all articles by Amil Dasgupta

Amil Dasgupta

London School of Economics (LSE); European Corporate Governance Institute (ECGI)

Konstantinos E. Zachariadis

School of Economics and Finance, Queen Mary University of London

Date Written: March 6, 2011


Mutual funds are significant blockholders in many corporations. Concerns that funds vote in a pro management manner to garner lucrative pensions contracts led the SEC to mandate the disclosure of proxy votes. We present a model of mutual fund voting in the presence of potential business ties. We characterize the limits of delegated activism by mutual funds pre- and post-disclosure and show that disclosure is not a panacea: for some proposals disclosure hurts activism. The desirability of disclosure also depends on the distribution of business ties amongst mutual funds. We provide support for existing empirical findings and generate new testable implications.

Keywords: D72, G23, G34, G38, K22

JEL Classification: delegated activism, proxy vote disclosure, mutual funds, business ties

Suggested Citation

Dasgupta, Amil and Zachariadis, Konstantinos E., Delegated Activism and Disclosure (March 6, 2011). Available at SSRN: or

Amil Dasgupta

London School of Economics (LSE) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7458 (Phone)
+44 20 7955 7420 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Konstantinos E. Zachariadis (Contact Author)

School of Economics and Finance, Queen Mary University of London ( email )

Graduate Centre
Mile End Campus
London, E1 4NS
United Kingdom
+44 20 7882 8698 (Phone)


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