Common Institutional Investors and Board Representation in Rival Firms - new publication by Harald Hau
The large increase in common institutional ownership has raised legitimate antitrust concerns. While the exact channel by which common institutional shareholders might influence firm policy remains unclear, a prominent potential mechanism is corporate board representation.
Using hand-collected data on shareholders' board representation, Hau and his co-authors show that instances of institutional investors simultaneously holding board positions in rival companies are exceedingly rare and do not account for the positive correlation between common institutional ownership and firm-pair profitability.
Their findings suggest that board representation by institutional investors is unlikely to represent an empirically potent channel of influence on corporate policy.
The paper is co-authored with Heng Geng from Victoria University of Wellington, Roni Michaely from The University of Hong Kong and ECGI, and Binh Nguyen from RMIT University Vietnam.
It was published in the Journal of Corporate Finance, and is available here.
Sep 30, 2025