Bebchuk & Hirst Article on Index Funds Wins Fernández de Araoz Award on Corporate Finance

Tami Grozwald Ozery is a co-Editor of the Forum and Fellow at the Harvard Law School Program on Corporate Governance.

Related research from the Program on Corporate Governance includes The Agency Problems of Institutional Investors by Lucian Bebchuk, Alma Cohen, and Scott Hirst (discussed on the Forum here);  Index Fund and the Future of Corporate Governance: Theory, Evidence, and Policy by Lucian Bebchuk and Scott Hirst (discussed on the Forum here); and The Specter of the Giant Three (discussed on the Forum here).

The jury of the 2019 Jaime Fernández de Araoz Award on Corporate Finance voted recently to grant the award to a forthcoming article by Lucian Bebchuk and Scott Hirst, Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy. Awarded every other year, the award carries with it a cash prize of 10,000 EUR as well as a sculpture by the late Spanish sculptor Martín Chirino. The award ceremony is expected to take place in Madrid this fall, with the participation of his Majesty King Felipe VI of Spain.

According to the announcement of the award, the award’s purpose is “to contribute to developing the economy and corporate finance through acknowledging an applied research work in this field.” The jury selecting the award winner included 41 distinguished individuals (listed here) from the academic and business communities, and it reached its decision after considering 32 papers from 83 authors.

According to the award announcement, ”[t]he results presented in the article are key to understanding “the mechanisms of index fund management decisions and how policy design can contribute to the improvement of index funds”, and the article presents “detailed and comprehensive evidence … covering the full range of actions undertaken by those responsible for the management of index funds, as well as those that they fail to undertake.”

The Jaime Fernández de Araoz Award is the third prominent prize won by the Bebchuk & Hirst article. The article won earlier the 2018 IRRC Institute prize, which carried with it a cash award of $10,000, and the 2019 European Corporate Governance Institute’s Cleary Gottlieb Steen Hamilton Prize, which carries with it a cash award of EUR 5,000 (see announcements here, and here). The Bebchuk & Hirst article will be published in the December 2019 issue of the Columbia Law Review.

The Bebchuk & Hirst article is part of a larger ongoing project on stewardship by index funds and other institutional investors. The article builds on an analytical framework for understanding the monitoring and engagement decisions made by index funds put forward in a 2017 study, The Agency Problems of Institutional Investors, by Lucian Bebchuk, Alma Cohen, and Scott Hirst (discussed on the Forum here). The analysis in the article is supplemented by a recent empirical study by Lucian Bebchuk and Scott Hirst, The Specter of the Giant Three (discussed on the Forum here), which examines the substantial and continuing growth of the so-called Big Three index fund managers.

More information about the Jaime Fernández de Araoz Award is available here. The Bebchuk & Hirst article for which the prize was awarded is available here, and is discussed on the Forum here.

Trackbacks are closed, but you can post a comment.

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

  • Subscribe or Follow

  • Supported By:

  • Program on Corporate Governance Advisory Board

  • Programs Faculty & Senior Fellows