Pension Fund Corporate Engagement: The Fifth Stage of Capitalism
Industrial Relations, Vol. 59, No. 1, pp. 142-171
Posted: 31 Aug 2005
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
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