How to improve the pension fund engagement: A research proposal for Italian pension funds

Abstract

Given the economic weight of the assets managed and their social importance (due to their fiduciary duty towards their policyholders), PFs can influence and participate actively in the investee company’s decisions and literature has shown the importance of activism of this type of institutional investors (Gillan & Starks, 2000; Clark & Hebb, 2004). Institutional investors’ activism may be promoted through favourable legislation, but also through the adoption of good governance practices. Based on this framework, our aim is to understand what key issues that prevent PFs from being active owners and what possible solutions PFs could adopt in order to play an active role in the corporate governance of investee companies. Starting from pension funds’ difficulties, this paper develops a research proposal for describing and analysing the behaviour taken by pension funds and aims to present possible best practice.