The Geography of Shareholder Engagement: Evidence from a Large British Institutional Investor

Abstract

We study the global corporate engagement activities of a large UK-based asset manager from 2006 to 2011. Using proprietary data on these activities, we find that corporate engagements “behind-the-scenes” are frequently used to change corporate behavior. We show that geography is an important determinant for the occurrence of such engagements: UK firms receive significantly more engagements than their foreign counterparts. This finding gives rise to a “home bias” in corporate engagement. We also document that the extent of successful corporate engagements is significantly higher for U.S. firms than for domestic, UK firms.

Keywords: corporate engagement, ESG, geography, determinants

JEL Classification: G15, G23, G34