Download This PaperNo More Old Boys’ Club: Institutional Investors’ Fiduciary Duty to Advance Board Gender Diversity
68 Pages Posted: 21 Nov 2019 Last revised: 9 Nov 2021
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No More Old Boys’ Club: Institutional Investors’ Fiduciary Duty to Advance Board Gender Diversity
No More Old Boys’ Club: Institutional Investors’ Fiduciary Duty to Advance Board Gender Diversity
Date Written: 2021
Abstract
As the benefits of gender equality for governance become more apparent, boardroom diversity initiatives abound. At the same time, institutional investors play an increasingly central role in the corporate world. This Article takes a novel approach to achieve this necessary change. Institutional investors already oversee firm leadership quite closely. This Article suggests that institutional investors hold a fiduciary duty to ensure there is gender diversity in leadership. As objections to state mandates persist, institutional investors can bring the benefits of private ordering to play a central role in ensuring equality.
Institutional investors play a dominant role over firms as principal shareholders. With that power comes responsibility. As stewards to their beneficiaries and the companies in which they invest, institutional investors could have a fiduciary duty to observe and encourage equality for women in the boardroom. Such investors, by virtue of their influence, can foster a marked improvement in gender equality. This Article analyzes the role fiduciary duties play for institutional investors and how diversification should figure as central among them.
Keywords: diversity, fiduciary duty, corporate law, gender
JEL Classification: K22
Suggested Citation: Suggested Citation
Anat Alon-Beck (Contact Author)
Case Western Reserve University School of Law ( email )
11075 East Boulevard
Cleveland, OH 44106-7148
United States
2163683311 (Phone)
University of California, Berkeley - Berkeley Center on Comparative Equality & Anti-Discrimination Law
Boalt Hall
Berkeley, CA 94720-7200
United States