Do Passive Investors Impact Corporate Governance?

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Rupert Hargreaves
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The trend towards passive investing, and the decline of the active manager, has raised concerns that firms’ corporate governance could start to slip, as passive investors are less inclined to raise governance concerns than their active peers. Corporate governance: Passive Investors, Not Passive Owners Passive Investors, Not Passive Owners, a study by Ian R. Appel, Todd A. Gormley, and Donald B. Keim examined whether passive institutional investors, like Vanguard and Dimensional Fund Advisors do influence firms and if they care about firm-specific policies or governance choices. Excluding this study, there seems to be a lack of research on passive institutional investors,…

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Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk