Grahl (2006) has commented that current manifestations of institutional shareholder activism are limited by the rise of the shareholder value doctrine in EU member states and the absence of strong legal frameworks restraining corporate practice. Survey studies have pointed to a generally muted response to legislative encouragement that financial institutions engage in reformist activist practices. Several studies have attempted to measure the effect of legislation calling on financial institutions to disclose the extent of their involvement with companies in which they have invested. All such studies have concluded that strong shareholder activism policy would require adjustments to the manner of remuneration of investment managers and intermediaries. For example, a study of pension fund reporting immediately following the introduction of British legislation in 2000 found that most surveyed organisations had disclosed the use of ‘social considerations’ in investment processes (Mathieu, 2000), with little more added by way of elaboration. (The latter observation is also couched a high non-response rate (67 per cent).) More recent studies demonstrate the struggle of pension funds in this regard. Pension funds have tended to follow conservative ‘hands-off’ ownership strategies, whereas activist approaches typically require a very different ‘hands-on’ approach (Johnson & De Graaf, 2009; Eurosif, 2010).
Jan de Graaf, F. and Haigh, M. (2011), "Activism in European Pension Funds: Exerting Pressure on Intermediaries", Sun, W., Louche, C. and Pérez, R. (Ed.) Finance and Sustainability: Towards a New Paradigm? A Post-Crisis Agenda (Critical Studies on Corporate Responsibility, Governance and Sustainability, Vol. 2), Emerald Group Publishing Limited, Bingley, pp. 119-143. https://doi.org/10.1108/S2043-9059(2011)0000002012
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