APSS – How Well Do Voting Choice Policies Represent Investor Preferences?

You’re invited to join Pablo Montagnes, Associate Professor of Data & Decision Sciences and Political Science at Emory University, for an American Politics Speaker Series discussion sponsored by the Ash Center for Democratic Governance and Innovation and the Center for American Political Studies

Registration is encouraged but not required. This event series will not be recorded.

This event is open to Harvard ID holders only. Lunch will be served.

Abstract

Asset managers face increasing political risk stemming from concerns that they prioritize their own interests when voting on behalf of investors. Using survey evidence and structural estimation, we provide early evidence on how well asset managers represent their investors by studying the ideological alignment between the two in the initial implementation of “voting choice policies.” These policies allow investors in mutual funds and ETFs a limited menu of options to express their preferences on how fund managers vote their shares in corporate proxy

contests. Using original survey data, we measure investors’ preferences on management and shareholder proposals and structurally estimate the resulting ideological space. We place the menu of voting choice policies in the same space to assess their alignment. We find that voting choice policies are clustered in the first and third dimensions of the ideological space. These correspond to left-right preferences and the willingness to implement socially conservative restrictions on the agency of the firm’s managers. The addition of a simple new voting choice policy, which supports the positions of a majority of survey respondents, can increase investor-policy alignment.

About the Series

The United States is a crossroads. How can Americans connect to each other in deep and meaningful ways, despite holding drastically different political world views? What are the causes and consequences of our nation’s historic levels of partisan polarization? Just how far can democratic backsliding go? The American Politics Speaker Series (APSS) aims to bring together scholars who are doing research on these and other important questions. Hosted jointly with the Center for American Political Studies and chaired by Professors Benjamin Schneer and Justin de Benedictis-Kessner, each session will highlight a scholar whose research is at the forefront of the study of American politics.

Event Details

The Ash Center encourages individuals with disabilities to participate in its events. Should you wish to enquire about an accommodation, please contact our events team at info@ash.harvard.edu prior to the event.