Pension Fund Corporate Engagement: The Fifth Stage of Capitalism

Industrial Relations, Vol. 59, No. 1, pp. 142-171

Posted: 31 Aug 2005

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

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's 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 that promotes higher corporate, social and environmental standards and adds share value, thus providing long-term benefits to future pension beneficiaries.

Keywords: pension fund corporate engagement, corporate governance, socially responsible investment, global standards

Suggested Citation

Clark, Gordon L. and Hebb, Tessa M., Pension Fund Corporate Engagement: The Fifth Stage of Capitalism. Industrial Relations, Vol. 59, No. 1, pp. 142-171, Available at SSRN: https://ssrn.com/abstract=789724

Gordon L. Clark

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 (Contact Author)

Carleton Centre for Community Innovation ( email )

1125 Colonel By Drive
DT 2125
Ottawa, Ontario K1S0R2
Canada

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