Question A:
The two major proxy advisory firms – Glass Lewis and Institutional Shareholder Services – have announced their intention to offer multiple perspectives to clients rather than single voting recommendations – see, for example: https://www.ft.com/content/7860f94c-7b1c-49c9-9f4c-a561ee39ee31
Proxy advisory firms that provide general guidance on corporate governance, diversity and environmental practices will create measurably more shareholder value for investor clients than proxy advisory firms that provide specific voting recommendations.
Responses
Responses weighted by each expert's confidence
Question B:
Companies that scale back on their diversity, equity, and inclusion initiatives are likely to see a measurable improvement in their corporate value and performance.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 John Campbell |
Harvard | Bio/Vote History | ||
|
|
||||
 John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
|
It would be better if proxy firms staid out of politics entirely. More competition in the business and non-voting shares for those who want to farm out their votes would also help.
|
||||
 Francesca Cornelli |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
 Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Wenxin Du |
HBS | Bio/Vote History | ||
|
|
||||
 Darrell Duffie |
Stanford | Bio/Vote History | ||
|
The effect may exist, but I am uncertain whether it is measurable.
|
||||
 Janice Eberly |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
 Eugene Fama |
Chicago Booth | Bio/Vote History | ||
|
In my experience their role always has been just to provide information. No asset manager ever want to say that they just vote with the proxy advisors.
|
||||
 Xavier Gabaix |
Harvard | Bio/Vote History | ||
|
|
||||
 Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
 John Graham |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
 Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
|
While I believe that providing a diversity of viewpoints is better than a single viewpoint, it is not obvious this will create "measurably" more shareholder value.
|
||||
 Harrison Hong |
Columbia | Bio/Vote History | ||
|
|
||||
 Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
|
|
||||
 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
GL or ISS were very mixed in their recommendations. No evidence they added value. Information, but no recommendations, probably a modest improvement.
|
||||
 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Ralph Koijen |
Chicago Booth | Did Not Answer | Bio/Vote History | |
|
|
||||
 Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
|
|
||||
 Andrew Lo |
MIT Sloan | Did Not Answer | Bio/Vote History | |
|
|
||||
 Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
|
|
||||
 Sydney Ludvigson |
NYU | Bio/Vote History | ||
|
|
||||
 Matteo Maggiori |
Stanford GSB | Bio/Vote History | ||
|
|
||||
 Gregor Matvos |
Northwestern Kellogg | Bio/Vote History | ||
|
Not sure they have a first order impact on shareholder value as is.
|
||||
 Tobias Moskowitz |
Yale School of Management | Did Not Answer | Bio/Vote History | |
|
|
||||
 Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
|
Proxy voting generally has little impact on corporate decisions except where value is overwhelmingly clear, and this will be both more costly and lead to more divided votes. Unlikely to lead to measurable differences.
|
||||
 Christine Parlour |
Berkeley Haas | Did Not Answer | Bio/Vote History | |
|
|
||||
 Thomas Philippon |
NYU Stern | Bio/Vote History | ||
|
|
||||
 Manju Puri |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
 Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
 Paola Sapienza |
Hoover Institution Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
 Amit Seru |
Stanford GSB | Bio/Vote History | ||
|
|
||||
 Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
 Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
|
Proxy advisory firms can offer both. The market for advisory services will determine which advisory services are the most valuable to investors.
|
||||
 Jeremy Stein |
Harvard | Bio/Vote History | ||
|
|
||||
 Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
|
|
||||
 Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
|
|
||||
 Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
|
Real driver of shareholder value is the governance outcome (board quality, executive accountability, capital allocation, sustainability strategy) not whether a proxy advisor offers “general” vs “specific” advice. Actionable advise is more useful.
|
||||
 Toni Whited |
UMich Ross School | Bio/Vote History | ||
|
|
||||
Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
|
John Campbell |
Harvard | Bio/Vote History | ||
|
|
||||
|
John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
|
|
||||
|
Francesca Cornelli |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Wenxin Du |
HBS | Bio/Vote History | ||
|
|
||||
|
Darrell Duffie |
Stanford | Bio/Vote History | ||
|
I am uncertain whether the effect exists, and even if it exists,, whether it would be measurable.
|
||||
|
Janice Eberly |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Eugene Fama |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Xavier Gabaix |
Harvard | Bio/Vote History | ||
|
|
||||
|
Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
|
John Graham |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
|
Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
|
Depends on the company. For a firm that implemented aggressive policies that sacrificed shareholder value for other objectives, there could be a "measurable" increase. But, most companies had incremental policies and, if changed, it is not obvious there would be a big impact.
|
||||
|
Harrison Hong |
Columbia | Bio/Vote History | ||
|
|
||||
|
Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
|
|
||||
|
Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
There is little serious evidence that DEI increases shareholder value. Scaling it back reduces an imposed cost and seems more likely than not to increase shareholder value, but there is uncertainty on the "measurably" part.
|
||||
|
Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
there is a lot of heterogeneity and window dressing in what was being claimed vs done, too hard to say what this might mean
|
||||
|
Ralph Koijen |
Chicago Booth | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
|
|
||||
|
Andrew Lo |
MIT Sloan | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
|
|
||||
|
Sydney Ludvigson |
NYU | Bio/Vote History | ||
|
|
||||
|
Matteo Maggiori |
Stanford GSB | Bio/Vote History | ||
|
|
||||
|
Gregor Matvos |
Northwestern Kellogg | Bio/Vote History | ||
|
Sorting across firms by employees, customers, and other stakeholders who differ in preferences for these initiatives makes it difficult to predict the effect in equilibrium.
|
||||
|
Tobias Moskowitz |
Yale School of Management | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
|
Companies are pretty good both at re-branding and at hiring and retaining talent. I suspect that the programs that helped them get and retain talent will continue, as in the example of JPMorgan trading DEI for DOI.
-see background information here |
||||
|
Christine Parlour |
Berkeley Haas | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Thomas Philippon |
NYU Stern | Bio/Vote History | ||
|
|
||||
|
Manju Puri |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
|
Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
|
Depends on scale and NPVs of such programs.
|
||||
|
Paola Sapienza |
Hoover Institution Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Amit Seru |
Stanford GSB | Bio/Vote History | ||
|
|
||||
|
Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
|
Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
|
This would require assuming that the costs of DEI initiatives were large enough to have a measurable effect. Where is the empirical evidence?
|
||||
|
Jeremy Stein |
Harvard | Bio/Vote History | ||
|
|
||||
|
Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
|
|
||||
|
Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
|
Academic and industry studies consistently find that companies with diverse leadership teams tend to outperform on innovation, risk management, and long-term returns. Correlation is not causation, but there’s no credible evidence to the contrary either.
|
||||
|
Toni Whited |
UMich Ross School | Bio/Vote History | ||
|
|
||||
