(Black)Rock the Vote: Index Funds and Opposition to Management
48 Pages Posted: 26 Mar 2020 Last revised: 27 Jul 2022
Date Written: March 23, 2020
I show index funds are more likely to oppose management on contentious management sponsored proposals at firms held only by their family’s index funds than on proposals at firms co-held by their family’s active funds. Additionally, shareholder proposals garner a greater level of support by index funds when the firm’s shares are not simultaneously held by a fund’s same-family active funds. Consistent with “locked-in” motives to monitor, these results imply index funds participate as more engaged voters when same-family active funds avoid holding positions in a firm.
Keywords: Index funds, governance, proxy voting
JEL Classification: G23, G30, G34
Suggested Citation: Suggested Citation