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Small Investors Support The Boards. But Few Of Them Vote
Clearly some institutional investors such as state pension plans are better in their support of these governance issues than others such as mutual funds:
One reason I've found in my research is that institutional investors like pension plans are by design expected to think long-term. Long-term risks like climate change and poorly designed executive compensation plans which encourage short-term thinking are risks they can't afford to ignore. Meanwhile, many but not all of the retail investors who buy mutual funds too often think short term and are less inclined to care about what could damage a company's prospects five or ten years down the road.
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One reason I've found in my research is that institutional investors like pension plans are by design expected to think long-term. Long-term risks like climate change and poorly designed executive compensation plans which encourage short-term thinking are risks they can't afford to ignore. Meanwhile, many but not all of the retail investors who buy mutual funds too often think short term and are less inclined to care about what could damage a company's prospects five or ten years down the road.
Regards,
Ted