(Black)Rock the Vote: Index Funds and Opposition to Management

48 Pages Posted: 26 Mar 2020 Last revised: 27 Jul 2022

See all articles by Joseph Farizo

Joseph Farizo

University of Richmond - E. Claiborne Robins School of Business

Date Written: March 23, 2020

Abstract

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

Farizo, Joseph, (Black)Rock the Vote: Index Funds and Opposition to Management (March 23, 2020). Journal of Corporate Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3559783 or http://dx.doi.org/10.2139/ssrn.3559783

Joseph Farizo (Contact Author)

University of Richmond - E. Claiborne Robins School of Business ( email )

Richmond, VA 23173
United States

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