Abstract

The role of shareholders, and particularly of institutional investors, has shifted from a focus on shareholder rights to (also) a focus on shareholder duties. For instance, under SRD II, institutional investors need to develop and publicly disclose their engagement policy, describing how they integrate shareholder engagement in their investment strategy. The emphasis on institutional investors’ duties stems from the premise that these investors can steer companies and enhance long-term value creation and non-financial performance. This draft research forms the first step of a four-years Veni project to investigate the role of Dutch institutional investors in sustainability and aims at getting to know the Dutch institutional investors’ landscape, their preferences and their use of different available engagement tools.

First, the Dutch institutional investors’ landscape is explored and mapped. Then, after introducing and evaluating the different engagement tools Dutch institutional investors have, special attention is paid to the voting behavior of these investors. Following the methodology of Bolton et al. (2020), the political W-Nominate model (Poole & Rosenthal, 1985; Poole, 2005) is used to estimate the ideology of Dutch institutional investors based on their past voting behavior in a one- and two-dimensional setting. A sample of 3,223 ES proposals for the 2016-2021 period with voting decisions of 101 institutional investors and two proxy advisors (ISS and Glass Lewis) shows that Dutch institutional investors are on the left of the spatial model and thus are more social and environment-friendly than (most) other institutional investors in our sample.  

Paper

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Practicalities

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About the speaker

Anne Lafarre is an Assistant Professor at Tilburg University (The Netherlands) and Program Director of the Joint Bachelor’s Program in Data Science (with the Technical University of Eindhoven, The Netherlands). She received a personal research grant from the Dutch grant organisation NWO to study the role of shareholders in sustainable companies from summer 2021 onwards (4-years project) in an interdisciplinary setting. She has a background in law and in economics and her research interests are sustainable finance, corporate governance, corporate law, and the application of (new and classical) empirical methods in legal research.

About the ACLE

The Amsterdam Center for Law and Economics (ACLE) is a joint initiative of the Faculty of Economics and Business and the Faculty of Law at the University of Amsterdam. The objective of the ACLE is to promote high-quality interdisciplinary research at the intersection between law and economics.