Corporate Governance and Stewardship ECGI-ICGN Academic Day

The conference examined four papers on three primary topics: common ownership, annual general meetings (AGMs) and the agenda on environmental, social and governance (ESG) issues and investor engagement (two papers on this latter issue). The first discussion, addressing the antitrust risks stemming from common ownership, started from empirical evidence that may suggest anticompetitive effects and higher fares in the airline industry as a possible result of common ownership. More specifically, anticompetitive effects are alleged to arise in the form of reduced incentives for companies to compete aggressively, in order not to undermine portfolio profits of their “common owners”. At least in theory this creates the possibility of a tripartite trade-off between, diversification, governance and competition. A lively debate ensued, during which strong criticism was advanced on the actual existence of anticompetitive outcomes and the scope of institutional investors’ intervention in firms’ decision-making.
The need for further empirical studies on the issue, in order to better understand the mechanisms at play and to better inform potential policy initiatives, was a fundamental conclusion from the discussion.