A Sense of Purpose: Trends in Shareholder Engagement

Inside Americas Boardrooms
Not only are investors pushing boards to think more strategically about ESG, diversity, and long-term sustainable investment, they're also pushing for more shareholder communication around these topics.

In this episode, Doug Eakeley, Professor of Corporate & Business Law at Rutgers Center for Corporate Law & Governance, joins guest host Doug Chia, Executive Director of The Conference Board Governance Center, to describe the evolution that's taken place.

[blockquote source="Doug Eakeley, Professor, Rutgers Center for Corporate Law & Governance"]In the past 6 or 7 years, we've seen the emergence of active shareholder engagement on the part of passive institutional investors. That has many potential consequences in part because of the types of issues they are engaging.[/blockquote]

Social impact, climate change, and diversity and inclusion are among the phrases and issues being raised by today's major institutional investors in an effort to promote a more sustainable model for growth across today's top companies.

''The large influx of capital into passive index funds--now [comprising] 42 percent of all publically traded funds--has put a great deal more pressure on the BlackRocks, the Vanguards, and the State Street Global Advisors to align themselves with their investors...,'' said Eakeley, ''[and with] long-term strategic investment explicitly as opposed to short-termism.''

In this episode, Chia and Eakeley discuss the various trends at play in today's shareholder arena. How are boards preparing for these direct investor interactions? How is the board's relationship with management evolving as a result of shareholder pressures?

This episode was filmed from The Conference Board studios in New York City.