Do Index Funds Monitor?

• 成果类型: Article
• 署名作者: Heath, Davidson; Macciocchi, Daniele; Michaely, Roni; Ringgenberg, Matthew C.
• 署名单位: Utah System of Higher Education; University of Utah; University of Miami; University of Hong Kong; European Corporate Governance Institute
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhab023
• 发表日期: 2022
• 页码: 91
• 关键词: CORPORATE GOVERNANCE; regression-discontinuity; SHAREHOLDER ACTIVISM; INSTITUTIONAL OWNERSHIP; firm; COSTS; TIES; pay

摘要

Passively managed index funds now hold over 30 of U.S. equity fund assets; this shift raises fundamental questions about monitoring and governance. We show that, relative to active funds, index funds are less effective monitors: (a) they are less likely to vote against firm management on contentious governance issues; (b) there is no evidence they engage effectively publicly or privately; and (c) they promote less board independence and worse pay-performance sensitivity at their portfolio companies. Overall, the rise of index funds decreases the alignment of incentives between beneficial owners and firm management and shifts control from investors to managers.