Abstract

People who make financial investments do it for one reason, because they expect a return. Increasingly companies are expected to not only make high returns, but also do it in a way that has a high degree of corporate responsibility. Shareholder activism is a tactic used by large hedge funds and increasingly by the largest mutual funds. Typically, large hedge fund operators use shareholder activism as a way to influence the board of directors to make some change at a company either financially or within leadership. If the board doesn’t act accordingly the funds will often try to win seats on the board to enact change from within. For mutual funds it is becoming increasingly popular to spend money to enact change in terms of environmental, social, or governance concerns. In 2017, fund managers have invested over $45 billion dollars in campaigns to effect change at companies in their portfolios and the outlook is for growth in years to come.