Pension Fund Corporate Engagement: The Fifth Stage of Capitalism

Posted: 20 Aug 2010

See all articles by Gordon L. Clark

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment

Tessa Hebb

Carleton Centre for Community Innovation

Date Written: March 15, 2004

Abstract

Pension fund capitalism is a new, albeit evolving, stage of Anglo-American capital market development. It is marked by the ability of pension funds to aggregate the widely disbursed ownership of beneficiaries and therefore act as single entities with a unified voice. Pension funds within their investment portfolios are increasingly using this voice to engage companies. Such corporate engagement in its broadest definition is the use of one’s ownership position to influence company management decision making. Corporate engagement brings together four distinct underlying currents: first, the increased use of passive index funds; second, the corporate governance movement; third, the growing impact of socially responsible investing; and, finally, the impact of new global standards. At its best corporate engagement offers a long-term view of value that both promotes higher corporate, social and environmental standards and adds share value, thus providing long-term benefits to future pension beneficiaries.

JEL Classification: J26, M14, M50

Suggested Citation

Clark, Gordon L. and Hebb, Tessa M., Pension Fund Corporate Engagement: The Fifth Stage of Capitalism (March 15, 2004). Relations Industrielles/Industrial Relations, Vol. 59, No. 1, 2004, Available at SSRN: https://ssrn.com/abstract=1661280

Gordon L. Clark (Contact Author)

Oxford University - Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44 1865 285197 (Phone)
+44 1865 285073 (Fax)

HOME PAGE: http://www.geog.ox.ac.uk/staff/glclark.html

Tessa M. Hebb

Carleton Centre for Community Innovation ( email )

1125 Colonel By Drive
DT 2125
Ottawa, Ontario K1S0R2
Canada

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