2 Bebchuk and Hirst.
3 Eric A. Posner, Fiona M. Scott Morton, and E. Glen Weyl, “A Proposal to Limit the Anti-Competitive Power of Institutional Investors,” Antitrust Law Journal (forthcoming); Dorothy Shapiro Lund, “The Case against Passive Shareholder Voting,” Journal of Corporation Law (forthcoming).
4 Lucian Bebchuk and Scott Hirst, “Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy,” Columbia Law Review 119 (December 2019): 2029–146.
5 Jill E. Fisch, Asaf Hamdani, and Steven Davidoff Solomon, “The New Titans of Wall Street: A Theoretical Framework for Passive Investors,” University of Pennsylvania Law Review 168 (2020): 17–72.
6 Ronald Orol, “How Index Funds Could Turbocharge Activism,” TheStreet, July 15, 2017.
7 “Recent Institutional Investor Voting Trends in Contested Board Elections,” Harkins Kovler, March 11, 2019.
8 Ian R. Appel, Todd A. Gormley, and Donald B. Keim, “Standing on the Shoulders of Giants: The Effect of Passive Investors on Activism,” Review of Financial Studies 32, no. 7 (July 2019): 2720–74.
9 Michelle Celarier, “The Mysterious Private Company Controlling Corporate America,” Institutional Investor, January 29, 2018; Yvan Allaire, “The Troubling Case of Proxy Advisors: Some Policy Recommendations,” Institute for Governance of Private and Public Organizations (January 2013): 22.
10 Fisch, Hamdani, and Solomon; Orol.
11 Michal Barzuza, Quinn Curtis, and David H. Webber, “Shareholder Value(s): Index Fund Activism and the New Millennial Corporate Governance,” Southern California Law Review (forthcoming).
12 Dorothy Shapiro Lund, “The Case against Passive Shareholder Voting,” Journal of Corporation Law (forthcoming); Dorothy S. Lund, “Nonvoting Shares and Efficient Corporate Governance,” Stanford Law Review 71, no. 3 (March 2019): 687–745.
13 Posner, Morton, and Weyl.
14 John C. Coates, “The Future of Corporate Governance Part I: The Problem of Twelve,” Harvard Public Law Working Paper No. 19-07 (September 20, 2018).
15 General information on institutional fund flow trends can be found in the 2020 Investment Company Institute Investment Company Fact Book: A Review of Trends and Activities in the Investment Company Industry (London: Investment Company Institute, 2020); BrightScope/ICI Defined Contribution Plan Profile: A Close Look at erisa 403(b) Plans (BrightScope/ICI, May 2016); Jack VanDerhei, Sarah Holden, Luis Alonso, Steven Bass, “401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2016,” Employee Benefit Research Institute Issue Brief, no. 458 (September 10, 2018).
16 See, e.g., Larry Fink, “A Fundamental Reshaping of Finance,” BlackRock, 2020; Cyrus Taraporevala, “Index Funds Must be Activists to Serve Investors,” Financial Times, July 24, 2018; Richard Feloni, “Vanguard’s Chairman Says Every CEO of a Public Company Should Be Able to Answer 7 Questions,” Business Insider, March 8, 2018.
19 Employee figures based on SEC Fiscal Year 2019 Agency Report and BlackRock’s 2019 Investment Stewardship Annual Report.