Index Funds and the Future of Corporate
Governance: Replying to Critics
Posted by Lucian Bebchuk (Harvard Law
School) and Scott Hirst (Boston University), on Monday, November 4,
Lucian Bebchuk is the James Barr Ames Professor of Law,
Economics, and Finance, and Director of the Program on Corporate
Governance, at Harvard Law School. Scott
Hirst is Associate Professor at Boston University School of
Law and Director of Institutional Investor Research at the Harvard
Law School Program on Corporate Governance.
This post is based on their
study (discussed on the Forum here). Related
research from the Program on Corporate Governance includes The
Agency Problems of Institutional Investors by Lucian Bebchuk,
Alma Cohen, and Scott Hirst (discussed on the Forum here);
Specter of the Giant Three by Lucian Bebchuk and Scott Hirst
(discussed on the Forum
recently placed on SSRN a revised and expanded version of our forthcoming
Index Funds and the Future of Corporate Governance: Theory, Evidence and Policy,
which will be published in the December issue of the Columbia Law Review.
The article puts forward a comprehensive theoretical, empirical and policy
analysis of index fund stewardship.
Our article has been in
circulation for the last year, and we have been fortunate to receive reactions
and responses to our work from many academics, both in their writings and in
various fora in which earlier versions of this article were presented, as well
as from practitioners. Our revision attempts to engage in detail with the
arguments of a wide range of commentators taking a different view on index fund
Among the academic
works taking such a different view with which we engage are studies by
Ian Appel, Todd Gormley & Donald Keim;
Jill Fisch, Assaf Hamdani & Steven Davidoff Solomon;
Ron Gilson & Jeff Gordon;
Marcel Kahan & Ed Rock;
Dorothy Shapiro Lund;
Jonathan Lewellen & Katharina Lewellen;
Alexander Platt; and
Eric Posner, Fiona Scott Morton & Glen Weyl.
Among the practitioners
with whose reactions or arguments we engage are officers of the “Big Three,”
State Street Governance Advisors, and
We continue to work on
these issues, and comments and reactions from readers would be most welcome.
The revised version of
our article is available here.
Harvard Law School Forum
on Corporate Governance and Financial Regulation
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