Women Corporate Directors – Boston
5:00 - 6:15 PM
The Changing Investment Landscape
The last 10 years have seen a dramatic change in the investment landscape. Index funds such as Blackrock, State Street and Vanguard now control more than 45% of US equities, up from 25% a decade ago. These index funds are often called “passive investors” but that is not an accurate description. Index investors consider themselves the definitive long term shareholders since they are required to own a company’s shares. They actively focus on governance issues such as board diversity and ESG, which they believe create long term shareholder value. Index funds also vote with activist investors if they believe the activists have a better strategy than management.
Despite the increasing importance of index funds, many companies have not adjusted their approach to investor management. Management teams and boards of directors tend to focus on active investors, even as their ownership stakes have declined. IR programs are often geared towards reaching out to portfolio managers rather than the key stewardship people at the index funds.
Does your management team understand what topics are of most concern to all of their investors? Does the team have the right resources to address these issues? Is the company reporting on metrics requested by all investors? What questions should directors be asking to ensure the company’s communications strategy reflects today’s investment landscape?
Stephen L. Brown, a Senior Advisor with the KPMG Leadership Center, will discuss the role of the board in understanding the stewardship concerns of index funds and how their investment style influences their voting.
Stephen L. Brown is a Senior Advisor with the KPMG Board Leadership Center, which champions outstanding corporate governance to drive long-term corporate value and enhance investor confidence.
Formerly, Stephen was CEO of the Society for Corporate Governance and managed TIAA’s corporate governance group and led the corporate governance and social responsibility initiatives related to the firm’s over $800 billion investment portfolio. Prior to TIAA, he practiced securities law at WilmerHale and Skadden and was an associate with Goldman Sachs.
Stephen is an adjunct professor at McDonough School of Business at Georgetown, Yale University, and in the Skadden, Arps Honors Program in Legal Studies, Colin Powell School for Civic and Global Leadership at City College of New York. He received his B.A. with honors from Yale and his J.D. from Columbia University Law School where he was a Harlan Fiske Stone Scholar. He serves on several nonprofit boards and is an elected public school board member.