On Beyond CalPERS: Survey Evidence on the Developing Role of Public Pension Funds in Corporate Governance

We survey public pension funds and report on their litigation and non-litigation activism. We report that activity levels vary, dramatically. Although some funds engage in a substantial amount of governance activity, a significant number do little or nothing. Public pension funds engage in a very limited spectrum of non-litigation activities, involving primarily low visibility activities such as participation in corporate governance organizations or withholding votes from a management nominee. Funds with more assets under management are far more active in non-litigation activism. Similarly, funds that devote more resources generally to in-house activities are also more active in non-litigation activism. A marked difference exists for litigation activism. Public pension fund participate much more extensively in shareholder litigation than in other governance activities. Despite the importance of asset size for participation levels, we also find that for litigation-related activism, smaller funds participate with equal frequency.