Rana Foroohar
Does corporate governance matter? Or, to be more precise, do investors really care about it? This is a question that I have been pondering for two reasons. First, huge amounts of passive investment has made questions about corporate decision making irrelevant for many investors. When you are just tracking the index, you are not looking at what a company is really doing on the ground and whether its leaders are making the right calls. You are simply passing the buck to the market.
But there is another, less explored, way in which investors may be passing the buck. Institutional investors have come to own roughly two-thirds of all the outstanding shares in US corporations. That giv…
Read the full article at: http://www.afr.com/news/world/are-investors-passing-the-buck-on-corporate-governance-20171029-gzaoga