The article by Susan Baker and Jonas Kron provides a fascinating example of how Trillium Asset Management has used its influence as an investor to impact corporate policies on an important social issue. But is Trillium’s story an outlier or part of a trend? Do companies change their governance practices in response to input from shareholders? If so, why? And more importantly, does it benefit the bottom line?
Corporate governance engagement is a distinctive form of dialogue between shareholder and company. In contrast to analyst calls or shareholder activism, corporate governance engagement is not based on the specifics of business strategy. Instead, shareholders ask whether corporate governance policies and practices are likely to lead to decisions made in the best long term interests of shareholders. As a part of this, shareholders may raise questions about board accountability to shareholders, executive compensation, or corporate social responsibility practices…..
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