{"id":79246,"date":"2021-05-17T08:00:00","date_gmt":"2021-05-17T12:00:00","guid":{"rendered":"https:\/\/www.bu.edu\/law\/?post_type=bu-article&p=79246"},"modified":"2021-07-26T11:51:00","modified_gmt":"2021-07-26T15:51:00","slug":"corporate-america-rethinks-its-purpose","status":"publish","type":"bu-article","link":"https:\/\/www.bu.edu\/law\/record\/articles\/2021\/corporate-america-rethinks-its-purpose\/","title":{"rendered":"Corporate America Rethinks its Purpose"},"content":{"rendered":"\t
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By Rebecca Beyer \u2726 Illustrations by Fatinha Ramos<\/p>\n\t\t\t\n\n\t\t\t\n\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tCorporate America Rethinks its Purpose<\/em>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/h1>\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t

The private sector looks beyond profits to satisfy stakeholders\u2014and shareholders\u2014who want to see progress on environmental and social issues.<\/h4>\n\t\t\t\t\t\t\n\t\t\t\t\t<\/div>\n\n\t\t\t\t<\/div>\n\n\t\t\t\n\t\t<\/div>\n\n\t\t\n\t<\/div>\n\n\t\n
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May 17, 2021<\/div>\n\t\t\n\t\t\t\t
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Discussing a New Framework<\/h4>\n\t\t\t\t

A BU Law & Coalition for Inclusive Capitalism event<\/p>\n\t\t\t<\/div>\n\t\t<\/a>\n\t<\/div>\n<\/div>\n\n\n\n

W<\/span>hen Scott Hirst<\/a> was researching how large institutional investors vote on so-called social responsibility resolutions at corporations, he noticed something unusual. Opinion polls suggested that a majority of Americans<\/a> support corporate disclosure of political spending; but institutional investors\u2014especially the two largest, BlackRock and Vanguard, which many Americans invest with\u2014generally voted against<\/em> shareholder proposals encouraging such disclosure. As a result, only one out of nearly a hundred proposals dealing with political activities passed in 2014, the year Hirst studied.<\/p>\n\n\n\n

\u201cAt the time, there was a significant disconnect between how the largest investment managers were voting on social responsibility resolutions and how their own investors likely felt about those subjects,\u201d explains Hirst, a BU Law associate professor of law. <\/p>\n\n\n\n

Although opinion polls from the time revealed how Americans in general felt about corporate political spending, investment managers did not conduct corresponding polls of their own investors.<\/p>\n\n\n\n

\u201cWhat did their own investors actually think?\u201d Hirst says. \u201cThat\u2019s a critical question, but they never actually asked the question.\u201d<\/p>\n\n\n\n

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\u201c…There was a significant disconnect between how the largest investment managers were voting on social responsibility resolutions and how their own investors likely felt about those subjects.\u201d<\/div>