Abstract
Companies do many good things in the world, but they also cause pollution, contribute to global warming, and provide unsafe and unhealthy products. Many people decry this bad behaviour without realizing that they own these companies, through their pension plans or holdings of index funds. They/we benefit from the profits these companies make but we also have the power, through our votes, to stop these companies behaving badly. Most people invest through mutual funds (like BlackRock or Vanguard) and currently these intermediaries do the voting and engagement for us (most people don't even realize this).
My co-authors, Hélène Landemore, Luigi Zingales, and I propose a novel way to give mutual fund investors a voice. Based on the experience of citizen assemblies in the political sphere, we propose allocating the power to decide how to cast mutual funds’ votes in corporate ballots on environmental, social, and political issues to a randomly drawn assembly of their investors. We analyze the advantages and limitations of such an approach and discuss various implementation issues.
