Real Shareholder Democracy Is the Answer to ESG
Three academics propose “investor assemblies” as a response to the crisis in corporate governance.
Illustration: Saehan Parc for Bloomberg
Last year, 15 Republican state finance chiefs lambasted Blackrock Inc. Chief Executive Officer Larry Fink for sacrificing his investors’ returns to advance his climate agenda — and for profiting from investments in China at the expense of US security. In other words, they criticized him for maximizing financial return at the expense of one value (patriotism) and for not maximizing financial return in the name of another value (the environment).
Gone are the days when asset managers could do their jobs unencumbered by moral and political considerations. Today, large asset managers are pressured in different, sometimes irreconcilable, directions.