Bebchuk’s study of index funds wins IRRC Institute prize

Study, co-authored with Scott Hirst, examines big picture investor issues

The Investor Responsibility Research Center Institute awarded its 2018 investor research prize to a study by Harvard Law School Professor Lucian Bebchuk LL.M. ’80 S.J.D. ’84. The study, “Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy,” was co-authored with Scott Hirst LL.M. ’01 S.J.D. ’16, research director of the Program on Institutional Investors at Harvard Law School and associate professor at Boston University School of Law.

The annual IRRC Institute’s investor research award recognizes innovative research focused on the nexus between real world economy activity and investment theory. The winning research team shares a $10,000 award.

Bebchuk and Hirst’s study examines the resources and decisions of index fund managers — how they monitor, vote and engage with their portfolio companies.  IRRC Institute’s Executive Director Jon Lukomnik described the study as making “a substantial contribution to understanding big picture, weighty issues for investors and the global economy.”

According to the IRRC’s press release, the study “provides an analytical framework for understanding the incentives of index fund managers,” “provides the first comprehensive and detailed empirical account of the full range of stewardship activities that index fund managers do and do not undertake,” and “considers the significant policy implications of the issues analyzed.”

The judges on the panel selecting the winning study were:

  • Robert Dannhauser, head of Capital Markets Policy, CFA Institute
  • James Hawley, professor emeritus and former Director of the Elfenworks Center for Fiduciary Capitalism at St. Mary’s College of California
  • Erika Karp, founder and CEO and Chair of the Board of Cornerstone Capital
  • Nell Minow, governance expert and Huffington Post columnist