Jasmin Sethi is Vice President and Matthew Mallow is Senior Managing Director and Chief Legal Officer at BlackRock, Inc. This post is based on a recent article by Ms. Sethi and Mr. Mallow. This paper comments on two papers issued by the program, The Myth that Insulating Boards Serves Long-Term Value by Lucian Bebchuk (discussed on the Forum here), and Can We Do Better by Ordinary Investors? A Pragmatic Reaction to the Dueling Ideological Mythologists of Corporate Law by Leo E. Strine (discussed on the Forum here). Additional related research issued by the program includes The Long-Term Effects of Hedge Fund Activism by Lucian Bebchuk, Alon Brav, and Wei Jiang (discussed on the Forum here), and Securing Our Nation’s Economic Future by Leo E. Strine (discussed on the Forum here).
In our article entitled Engagement: The Missing Middle Approach in the Bebchuk–Strine Debate, recently published in the NYU Journal of Law & Business, we contend that in the debate over whether more director or shareholder control would maximize firm value, a critical approach for influencing firm management effectively is missing. This approach is shareholder engagement, and it is growing in importance for asset managers and institutional investors in influencing the actions of directors and firm management.