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Fiduciary duty should always override it. Once the shareholders have been returned their maximum amount of wealth, then they can choose any cause they’d like.
And as you mentioned, decisions being made intentionally against financial interest causes distortions in the economy and Misallocation of capital.
Fiduciary duty should always override it. Once the shareholders have been returned their maximum amount of wealth, then they can choose any cause they’d like.
And as you mentioned, decisions being made intentionally against financial interest causes distortions in the economy and Misallocation of capital.
I'm telling you there is not an obligation to do this if the people running the pension fund can come up with some business reason not to make certain investments. Such a reason might be simply a belief that more money will be made for the pension in the long run by making different investments.
Courts don't like to second guess such decisions. They do not regard that as their role. Plus, if they interpreted this narrowly they would end up running every pension plan in the country. As long as a particular decision can be said to be within the "business judgment" of the directors of the pension fund, a court will not interfere with their actions based on an alleged breach of fiduciary duties or any other reason.
I'm telling you there is not an obligation to do this if the people running the pension fund can come up with some business reason not to make certain investments. Such a reason might be simply a belief that more money will be made for the pension in the long run by making different investments.
Courts don't like to second guess such decisions. They do not regard that as their role. Plus, if they interpreted this narrowly they would end up running every pension plan in the country. As long as a particular decision can be said to be within the "business judgment" of the directors of the pension fund, a court will not interfere with their actions based on an alleged breach of fiduciary duties or any other reason.
I’m not saying you’re wrong from a legal perspective. I guess I’m saying it from my personal opinion of how I would consider to make decisions when I’m managing someone else’s money.
Some pension funds already follow political boycotts and biases in their investing without regard to their fiduciary responsibilities. So, ESG investing would likely follow.
TIAA-CREF, the Teachers Insurance and Annuity Association and the College Retirement Equities Fund, is a financial organization that provides investment and insurance services for those working for organizations in the nonprofit industry in academic, research, medical, government, and cultural fields. This massive fund (Assets Under Management >$1 trillion) has been following BDS guidelines (The Boycott, Divestment, Sanctions movement works to end international support for Israel).
The government should not issue mandates like this. IMO, it does violate fiduciary responsibility. Although I had the option, I avoided investing any any TIAA product as I found a number of their products (mainly annuities) were difficult to understand.
ESG investing is perfectly acceptable when the investors are making their own decisions with their own money on where and what to invest in.
Biden said in his veto message that ESG is good for investors. That's factually incorrect, as everyone agrees.
My belief is to let investors separate their politics from their finances. In other words I value investors for their financial acumen, not their good political feelings.
Quote:
Originally Posted by moguldreamer
A recent analysis by Bloomberg found that last year, ESG funds severely underperformed the market — in some cases by well more than 10%. In other words, if you bought the stocks that ESG funds sold, and sold the stocks that ESG funds bought, you’d have made a lot of money in recent years.
Academic evidence suggests ESG has cost the public billions of dollars of reduced returns on their retirement nest eggs.
Many of the investments that are highly ESG and SJ rated are, in business terms, "boondoggles." Solyndra was one that is quite well-known. My view is I don't want someone being generous with my money.
Many of the investments that are highly ESG and SJ rated are, in business terms, "boondoggles." Solyndra was one that is quite well-known. My view is I don't want someone being generous with my money.
I've lost touch with Brian Harrison, recruited to become the CEO of Solyndra. He was an odd choice to become its CEO. He was a manufacturing guy and not a general manager type. He really didn't know much of anything about finance, innovation, product development, administration, marketing or sales. Just manufacturing.
When he was selected, most of us in Silicon Valley looked at each other with puzzled expressions. I liked his wife, although I must admit I found it difficult to look her in the eyes. Two of her other features were more, uh, outstanding.
Perhaps, but only in the same sense that requiring stock brokers to pass a Series 7 exam is "government interference".
I get your joke, but only radical Libertarians are against all laws, and they are also against bailouts.
Not at all correct - the series 7 licenses (or the series 6, 63, 65 and more) are not issued by the government, they are issued by FINRA - The Financial Industry Regulatory Authority - it is technically a private corporation that regulates members, brokerage firms and exchange markets. This is a self governing industry technically - with SEC oversight.
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