Institutional investors conduct more governance research and are less likely to follow proxy advisor vote recommendations when a company’s bonds comprise a larger share of their assets.
Bond holdings of companies with low
ESG scores and where the
fixed-income fund manager is more likely to be attentive and influence
their institutions’ voting decisions drive these findings. The findings
do not concentrate on companies or shareholder proposals where
creditor-shareholder conflicts are likely. Overall, the findings suggest
that corporate bond holdings influence how actively institutions
monitor their equity positions and contribute to institutions’ overall
incentive to be engaged stewards.
ICGN
© ICGN - International Corporate Governance Network
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