PRELIMINARY EVIDENCE FROM MONITORING ACTIVITIES BY PENSION FUNDS AND INVESTMENT MANAGERS AND ATTITUDES TOWARDS SHAREHOLDER ACTIVISM BY PENSION FUNDS

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Abstract

There is widespread support for the proposition that pension funds can, should and do play an important role in monitoring management in the companies in which they invest. This article examines whether Irish occupational pension funds and investment managers use voting, engagement and intervention as monitoring strategies in relation to investee companies. Furthermore, the article examines whether there are significant differences in attitudes between the two groups across key themes relating to shareholder activism by occupational pension funds in order to identify whether potential agency problems may exist in relation to delegation and representation. The results of the research suggest low levels of monitoring by Irish occupational pension funds compared to investment managers which could be explained by delegation. Furthermore significant differences in perceptions were identified in relation to the perceived importance of “Anti-takeover measures”, “Improving information flow to shareholders” and “Remuneration” to pension funds, when compared against the rankings for the impact of pension funds to each of these particular areas.

Keywords: Corporate Governance, Pension Funds, Institutional Shareholders, Investment Managers, Agency Problems

How to cite this paper: Lynn, T., & Mulgrew, M. (2008). Preliminary evidence from monitoring activities by pension funds and investment managers and attitudes towards shareholder activism by pension funds. Corporate Ownership & Control, 6(2-4), 500-523. https://doi.org/10.22495/cocv6i2c4p7