I’ve spent much of the day reporting on the battle between hedge fund manager Bill Ackman and the Target Corporation .
Ackman is seeking representation on Target’s board of directors.
Today, two firms that make their money by advising shareholders who they support in such battles came out with their recommendations.
These opinions, particularly the ones from the firm Riskmetrics, can play an important role in determining who will emerge victorious in such proxy fights.
While I dutifully report their conclusions, my own conclusion after days like today is that these firms should not exist in the first place.
Why should any institution outsource the decision of whom to vote for in a particular proxy fight to an outside firm?
To be fair, most institutional investors do not rely on proxy advisory firms in order to figure out whom they will support. But quite a few do.
Index funds are the obvious audience for services such as these, but I wonder how difficult it would be for these firms as well as many others to use their own discretion in reviewing the merits of a particular proxy fight.
Can it really be that hard or time consuming to be responsible for helping to determine the future of a company of which you own a stake?
I think not.
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