A new take on voice: the influence of BlackRock’s ‘Dear CEO’ letters

Andrea Pawliczek (), A. Nicole Skinner () and Laura A. Wellman ()
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Andrea Pawliczek: University of Colorado at Boulder
A. Nicole Skinner: University of Georgia
Laura A. Wellman: Pennsylvania State University

Review of Accounting Studies, 2021, vol. 26, issue 3, No 8, 1088-1136

Abstract: Abstract We examine whether broad-based public engagement by institutional investors influences the behavior of portfolio firms. We investigate this question in the context of BlackRock’s annual Dear CEO letter, which in recent years has called for portfolio firms to acknowledge and quantify the impact of environmental and regulatory factors on their firms. We find that portfolio firms’ disclosures during the post-letter period reflect topics similar to those discussed in the letters, controlling for a variety of firm and disclosure characteristics and the occurrence of private engagements. Moreover, BlackRock appears to value these additional disclosures, as it more often votes with management on shareholder proposals during subsequent annual shareholder meetings. Finally, motivated by BlackRock’s attempts to mobilize firms toward its specific policy recommendations, we also provide some evidence that firms’ lobbying efforts during the post-letter period become more aligned with the issues highlighted in the letter, especially when firms’ share BlackRock’s policy preferences ex ante. Taken together, our evidence suggests that portfolio firms are responsive to BlackRock’s public engagement efforts.

Keywords: Institutional ownership; Shareholder engagement; Shareholder voice; Disclosure; ESG; Lobbying (search for similar items in EconPapers)
JEL-codes: G32 G34 M41 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11142-021-09603-x

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