Council of Institutional Investors

Looking Back at 30 Years of Leadership on Corporate Governance
Tuesday, March 31, 2015
by: Ann Yerger

Section: CII Governance Alert

This spring, as CII celebrates its 30th anniversary, it’s worth remembering how far our organization, and institutional investors generally, have traveled.

Thirty years ago, the Dow Jones was at 1200. The Vanguard 500 Index Fund, the first index mutual fund available to the general public, was only 10 years old. Institutional investors owned on average about a third of U.S. equities. And activists—then called corporate raiders—were making headlines (some things don’t change all that much).

Corporate governance was of little interest... to anyone.

From the start, CII pushed the boundaries. Its first efforts focused on organizing unprecedented meetings between management and institutional shareholders. CII adopted the first-ever “Shareholder Bill of Rights” setting out what members believed were basic rights for shareholders. Today these principles are mainstream; many have been embraced by business groups such as the Business Roundtable.

Much has happened in three decades. Institutional investors now own more than half of the U.S. equity market and more than 70 percent of the largest U.S. companies. Investors have weathered Black Monday, the dot com bust, the corporate scandal era of Enron and WorldCom, and the global financial crisis.

And corporate governance has transformed U.S. business. Companies are generally more responsive to shareholder concerns, and increasingly their responses are significant. Directors are more accountable and receptive to shareholders. Investors understand that corporate governance matters and “traditional” asset managers routinely engage on governance issues with portfolio companies.

Through it all, CII members have carried the torch for effective corporate governance and strong shareholder rights. CII is deeply grateful and proud of our joint accomplishments. Thank you to our members for the impact you have made and your support of CII.
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