Shareholder Concentration: A Force For Good?

Is Shareholder Concentration a good or bad thing? One of the key arguments against passive investing is the lack of influence shareholders have on the actions of company management. The argument is that if a significant percentage of a company is owned by one large passive investor, such as Blackrock or Vanguard, then smaller shareholders will be overlooked by management and the lack of interest by passive owners will lead to corporate governance issues. Vanguard has tried to allay these concerns by introducing an “Investment Stewardship program,” which guides the investment manager’s proxy voting and engagement activity. Shareholder Concentration: A…