6 ms·

How does it work with institutional investors? Like, do Vanguard and Blackrock get to assign a board member each to serve their interests indirectly? Perhaps th

by adtac 4y ago

How does it work with institutional investors? Like, do Vanguard and Blackrock get to assign a board member each to serve their interests indirectly? Perhaps that explains why.

bombcar 4y ago
Institutional investors like Vanguard usually just confirm the board in whatever the board is doing. They effectively do NOT "own" the company in a way that would involve them making decisions on it. Sometimes they pass questions on to the shareholders of the funds, which everyone ignores.
- themitigating 4y ago
  Which is their choice
- mywittyname 4y ago
  > Sometimes they pass questions on to the shareholders of the funds, which everyone ignores. Which means that people like me, who vote every time, apparently are reasonably influential.
vba616 4y ago
What do you think their interests are? Mostly their job is to buy all the stocks. If Twitter goes down, you think someone is going to say "oh no, you shouldn't have bought all the stocks"? Well, probably, because people will say anything.
- mwint 4y ago
  Both of these investors mentioned have “ESG” policies where they will deliberately influence companies to act in certain political ways, rather than purely for the furtherance of the company. Whether that’s good or bad is up for debate, but the Vangaurds of the world certainly have interests beyond buying and holding all the stocks.
  - deleted 4y ago
    [deleted]
  - nullc 4y ago
    ESG funds are such a scam. They charge high management fees and because of the pressure to deliver market returns (without which almost no one would buy them) they end up owning substantially the same stuff-- when they exclude a company because its this weeks' press whipping boy they replace it with more shares selected to optimize their correlation with the replaced company. Now as always the only lesson to companies is "don't get caught" or "make sure you put a positive spin on it". I wish they did meaningfully push companies to implement profit incompatible policies-- then at least they'd be interesting to short.
  - vba616 4y ago
    An "interest" seems to me like it has a bit of a connotation beyond a "preference". It suggests some substantial motivation that I'm not sure ESG policies rise to the level of. Individuals working for Vanguard have some motivation to talk about ESG and go through the motions. But at the end of the day, if they buy all the stocks, and if their customers understand that they buy all the stocks, then how can ESG considerations make a meaningful difference in the overall job? It seems way too constrained.
nradov 4y ago
Vanguard has a stewardship team which decides how they vote on shareholder proposals. They try to vote in a way that maximizes long-term value. https://corporate.vanguard.com/content/corporatesite/us/en/corp/how-we-advocate/investment-stewardship/stewardship-in-action.html https://corporate.vanguard.com/content/corporatesite/us/en/c...
- jimbob45 4y ago
  Vanguard and BlackRock are well publicized as having pushed leftist politics through many of their initiatives[0]. The quote, in the article, of >We vote in accordance with these governance principles to represent the long-term interests of Vanguard fund investors. would imply that they may vote in ways that forward these leftist initiatives. However, there is no evidence to show that their votes on boards have any agenda beyond profit-maximization. [0]https://www.blackrock.com/corporate/about-us/diversity-equity-and-inclusion https://www.blackrock.com/corporate/about-us/diversity-equit...
  - hef19898 4y ago
    That's the first time I hear anyone refer to Blackrock as anything other than hardcore capitalists, let alone left wing...
    - kasey_junk 4y ago
      Blackrock has a strong environmental ESG bent currently. In a binary political system that’s how one of the biggest capitalists in the world get labeled “left wing”. https://www.sierraclub.org/press-releases/2020/01/blackrock-responds-demands-for-stronger-climate-action-bold-new-commitments https://www.sierraclub.org/press-releases/2020/01/blackrock-...
      - hef19898 4y ago
        Ah, then the majority of the German car manufacturers just turned left wing tree lovers.
    - 4y ago
HWR_14 4y ago
Vanguard, IIRC, buys and manages a portfolio on their user's behalf. Their uses are the ultimate beneficiaries of the stock and can vote the proportional share they own.

by adtac 4y ago

How does it work with institutional investors? Like, do Vanguard and Blackrock get to assign a board member each to serve their interests indirectly? Perhaps that explains why.

bombcar 4y ago

Institutional investors like Vanguard usually just confirm the board in whatever the board is doing. They effectively do NOT "own" the company in a way that would involve them making decisions on it. Sometimes they pass questions on to the shareholders of the funds, which everyone ignores.

themitigating 4y ago
Which is their choice
mywittyname 4y ago
> Sometimes they pass questions on to the shareholders of the funds, which everyone ignores. Which means that people like me, who vote every time, apparently are reasonably influential.

vba616 4y ago

What do you think their interests are? Mostly their job is to buy all the stocks. If Twitter goes down, you think someone is going to say "oh no, you shouldn't have bought all the stocks"? Well, probably, because people will say anything.

mwint 4y ago
Both of these investors mentioned have “ESG” policies where they will deliberately influence companies to act in certain political ways, rather than purely for the furtherance of the company. Whether that’s good or bad is up for debate, but the Vangaurds of the world certainly have interests beyond buying and holding all the stocks.
- deleted 4y ago
  [deleted]
- nullc 4y ago
  ESG funds are such a scam. They charge high management fees and because of the pressure to deliver market returns (without which almost no one would buy them) they end up owning substantially the same stuff-- when they exclude a company because its this weeks' press whipping boy they replace it with more shares selected to optimize their correlation with the replaced company. Now as always the only lesson to companies is "don't get caught" or "make sure you put a positive spin on it". I wish they did meaningfully push companies to implement profit incompatible policies-- then at least they'd be interesting to short.
- vba616 4y ago
  An "interest" seems to me like it has a bit of a connotation beyond a "preference". It suggests some substantial motivation that I'm not sure ESG policies rise to the level of. Individuals working for Vanguard have some motivation to talk about ESG and go through the motions. But at the end of the day, if they buy all the stocks, and if their customers understand that they buy all the stocks, then how can ESG considerations make a meaningful difference in the overall job? It seems way too constrained.

nradov 4y ago

Vanguard has a stewardship team which decides how they vote on shareholder proposals. They try to vote in a way that maximizes long-term value. https://corporate.vanguard.com/content/corporatesite/us/en/corp/how-we-advocate/investment-stewardship/stewardship-in-action.html https://corporate.vanguard.com/content/corporatesite/us/en/c...

jimbob45 4y ago
Vanguard and BlackRock are well publicized as having pushed leftist politics through many of their initiatives[0]. The quote, in the article, of >We vote in accordance with these governance principles to represent the long-term interests of Vanguard fund investors. would imply that they may vote in ways that forward these leftist initiatives. However, there is no evidence to show that their votes on boards have any agenda beyond profit-maximization. [0]https://www.blackrock.com/corporate/about-us/diversity-equity-and-inclusion https://www.blackrock.com/corporate/about-us/diversity-equit...
- hef19898 4y ago
  That's the first time I hear anyone refer to Blackrock as anything other than hardcore capitalists, let alone left wing...
  - kasey_junk 4y ago
    Blackrock has a strong environmental ESG bent currently. In a binary political system that’s how one of the biggest capitalists in the world get labeled “left wing”. https://www.sierraclub.org/press-releases/2020/01/blackrock-responds-demands-for-stronger-climate-action-bold-new-commitments https://www.sierraclub.org/press-releases/2020/01/blackrock-...
    - hef19898 4y ago
      Ah, then the majority of the German car manufacturers just turned left wing tree lovers.
  - 4y ago

HWR_14 4y ago

Vanguard, IIRC, buys and manages a portfolio on their user's behalf. Their uses are the ultimate beneficiaries of the stock and can vote the proportional share they own.