Hostname: page-component-cd9895bd7-gxg78 Total loading time: 0 Render date: 2024-12-25T20:37:06.569Z Has data issue: false hasContentIssue false
  • English
  • Français

The Ethical Undercurrents of Pension Fund Management: Establishing a Research Agenda

Published online by Cambridge University Press:  23 January 2015

Lori Verstegen Ryan  and
Bryan Dennis
Get access Rights & Permissions [Opens in a new window]

Abstract:

Over the last two decades, institutional investing has rocked the world of corporate governance in a transformation that has begun to be reflected in the finance, legal, and management literatures. Traditional players have seen their roles change and bases of power shift, and new actors have entered the governance equation. These transitions have entailed an ethical upheaval that is only beginning to be addressed in the business ethics literature.

This paper attempts to facilitate research in this area by integrating various literatures into an examination of a series of business ethics issues related to pension fund activism and portfolio management, fund staffing, and employee compensation. The primary intent of this project is to encourage increased business ethics research in the area of institutional investing in general and pension fund management in particular.

Type
Research Article
Information
Business Ethics Quarterly , Volume 13 , Issue 3 , July 2003 , pp. 315 - 335
Copyright
Copyright © Society for Business Ethics 2003

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adrangi, B., and Shank, T.. 1999. “Performance of Retirement Funds in Efficient Markets: Case of the Oregon Public Employee Retirement Fund.” American Business Review 17(2): 59–69.Google Scholar
Anand, V. 1994. “Corporate Funds Warned: Set Proxy Policies.” Pensions & Investments 22(5): 1, 33.Google Scholar
Andrews, E. S., and Hurd, M. D.. 1992. “Employee Benefits and Retirement Income Adequacy: Data, Research, and Policy Issues.” In Pensions and the Economy: Sources, Uses, and Limitations of Data, ed. Bodie, Z. and Munnell, A. H.. Philadelphia, Pa.: Pension Research Council and University of Pennsylvania Press: 1–30.Google Scholar
Bajtelsmit, V. L., and Bernasek, A.. 1996. “Why Do Women Invest Differently Than Men?” Financial Counseling and Planning 7: 1–10.Google Scholar
Bajtelsmit, V. L., and VanDerhei, J. L.. 1997. “Risk Aversion and Pension Investment Choices.” In Positioning Pensions for the Twenty-First Century, ed. Gordon, M. S., Mitchell, O. S., and Twinney, M. M.. Philadelphia, Pa.: Pension Research Council and University of Pennsylvania Press: 45–66.Google Scholar
Barr, P. G. 1998. “More Managers’ Heads are Rolling.” Pensions & Investments 26(11): 30.Google Scholar
Barreto, S. 1999. “Top Overall Salary is CIO’s $740,000 Check.” Pensions & Investments 27(20): 23.Google Scholar
Bear, L. A., and Maldonado-Bear, R.. 1994. Free Markets, Finance, Ethics, and Law. Englewood Cliffs, N.J.: Prentice Hall.Google Scholar
Black, B. S. 1992. “Agents Watching Agents: The Promise of Institutional Investor Voice.” UCLA Law Review 39: 811–894.Google Scholar
Blair, M. M. 1995. Ownership and Control. Washington, D.C.: Brookings Institution.Google Scholar
Boatright, J. R. 1999. Ethics in Finance. Malden, Mass.: Blackwell Publishers.Google Scholar
Bodie, Z., and Crane, D. B.. 1999. “The Design and Production of New Retirement Savings Products.” Journal of Portfolio Management 25(2): 77–82.CrossRefGoogle Scholar
Bodie, Z., Marcus, A. J., and Merton, R. C.. 1988. “Defined Benefit versus Defined Contribution Pension Plans: What are the Real Trade-Offs?” In Pensions and the U.S. Economy, ed. Bodie, Z., Shoven, J. B., and Wise, D. A.. Chicago, Ill.: University of Chicago Press: 139–160.CrossRefGoogle Scholar
Bodie, Z., and Papke, L. E.. 1992. “Pension Fund Finance.” In Pensions and the Economy: Sources, Uses, and Limitations of Data, ed. Bodie, Z. and Munnell, A. H.. Philadelphia, Pa.: Pension Research Council and University of Pennsylvania Press: 149–172.Google Scholar
Brancato, C. K. 1997. Institutional Investors and Corporate Governance. Chicago, Ill.: Irwin Professional Publishing and The Conference Board.Google Scholar
Casey, J. L. 1988. Ethics in the Financial Marketplace. New York: Scudder.Google Scholar
Chen, E., Weston, L. P., and Friedman, J.. 2002. “Bush Unveils Proposal to Keep Pension Funds Safe.” Los Angeles Times, February 2: part 3, page 1.Google Scholar
Chernoff, J. 2000. “$331 Million in Tobacco Stocks Could Go If CalSTRS Sets a Divestment Policy.” Pensions & Investments 28(8): 46.Google Scholar
Clow, R. 1999. “Money That Grows on Trees.” Institutional Investor 33(10): 212–215.Google Scholar
Conrad, A. F. 1988. “Beyond Managerialism: Investor Capitalism?” University of Michigan Journal of Law Reform 22: 117–178.Google Scholar
Del Guercio, D., and Hawkins, J.. 1999. “The Motivation and Impact of Pension Fund Activism.” Journal of Financial Economics 52: 293–340.CrossRefGoogle Scholar
Dobson, J. 1997. Finance Ethics. New York: Rowman & Littlefield.Google Scholar
Dygert, D., and Greetis, A.. 2002. “Self-Directed Brokerage Accounts and ERISA’s Fiduciary Requirements: A Workable Approach.” Journal of Pension Benefits 9(2): 37–40.Google Scholar
Economist. 1999. “The End of the Company Pension: Passing the Buck.” The Economist, May 15: 77–79.Google Scholar
Falkenstein, E. G. 1996. “Preferences for Stock Characteristics as Revealed by Mutual Fund Portfolio Holdings.” Journal of Finance 51: 111–140.CrossRefGoogle Scholar
Fortin, R., and Michelson, S.. 1999. “Fund Indexing vs. Active Management: The Results Are ???” Journal of Financial Planning 12(2): 74–81.Google Scholar
Geisel, J. 1999. “IBM Uproar Moves Congress to Act on Cash Balance Plans.” Crain’s Cleveland Business 40 (October 4).Google Scholar
Greenwich Associates. 2001. Investment Management in the US –2000. Greenwich, Conn.Google Scholar
Hasnas, J. 1998. “The Normative Theories of Business Ethics: A Guide for the Perplexed.” Business Ethics Quarterly 8: 19–42.CrossRefGoogle Scholar
Horan, S. M. 1998. “A Comparison of Indexing and Beta among Pension and Non-Pension Assets.” Journal of Financial Research 21: 255–275.CrossRefGoogle Scholar
Institutional Investor. 2000. “No Manager is an Island.” 34(6): 194.Google Scholar
Investor Relations Business. 1998. “From Governance to Shareholder Value.” Nov. 23: 4.Google Scholar
Investor Relations Business. 1999. “Labor Pressures Money Managers.” Apr. 26: 13.Google Scholar
Jensen, M. C., and Meckling, W. H.. 1976. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics 3: 305–360.CrossRefGoogle Scholar
Jianakoplos, N. A., and Bernasek, A.. 1998. “Are Women More Risk Averse?” Economic Inquiry 36: 620–630.CrossRefGoogle Scholar
Johnson, R. D., and Greening, D. W.. 1999. “The Effects of Corporate Governance and Institutional Ownership Types on Corporate Social Performance.” Academy of Management Journal 42: 564–576.CrossRefGoogle Scholar
Kennedy, M. 2001a. “Finding, Keeping Staff Can Be a Struggle.” Pensions & Investments 29(8): 34.Google Scholar
Kennedy, M. 2001b. “Private Equity Taking Bigger Slice of Pension Pie.” Pensions & Investments 29(7): 1 ff.Google Scholar
Langbert, M. 1994. “ERISA: Law, Interests, and Consequences.” Journal of Economic Issues 28(1): 129–153.CrossRefGoogle Scholar
Levine, P. 1997. “Wide Pay Disparities for Funds, Gender.” Pensions & Investments 25(21): 23.Google Scholar
Mathisen, T. 1995. “Bogle Wins: Index Funds Should Be the Core of Most Portfolios Today.” Money 24(8): 9.Google Scholar
Nelson Information. 1999. Nelson’s Pension Fund Consultant Survey. Port Chester, N.Y.Google Scholar
O’Barr, W. M., and Conley, J. M.. 1992. Fortune and Folly: The Wealth and Power of Institutional Investing. Homewood, Ill.: Business One Irwin.Google Scholar
Ogden, J. 1996. “Do Pension Plan Consultants Do More Harm Than Good?” Global Finance 10(12): 14–19.Google Scholar
Rabin, K. 1996. “Better Pay, Tougher Job.” Plan Sponsor 4(20): 26–42.Google Scholar
Rawls, J. 1971. A Theory of Justice. Cambridge, Mass.: Harvard University Press.CrossRefGoogle Scholar
Roe, M. J. 1994. Strong Managers, Weak Owners. Princeton, N.J.: Princeton University Press.CrossRefGoogle Scholar
Romano, R. 1993. “Public Pension Fund Activism in Corporate Governance Reconsidered.” Columbia Law Review, 93(4): 795–853.CrossRefGoogle Scholar
Ryan, L. V., and Schneider, M.. 2002. “The Antecedents of Institutional Investor Activism.” Academy of Management Review 27: 554–573.CrossRefGoogle Scholar
Salisbury, D. L. 1994. “Beware of Misleading Information.” Institutional Investor 28(8): 69–70.Google Scholar
Securities Industry Association. 1999. Securities Industry Association Fact Book. New York: Securities Industry Association.Google Scholar
Sharpe, W. F. 1963. “A Simplified Model for Portfolio Analysis.” Management Science 10: 277–293.CrossRefGoogle Scholar
Smith, M. P. 1996. “Shareholder Activism by Institutional Investors: Evidence from CalPERS.” Journal of Finance 51: 227–252.CrossRefGoogle Scholar
Sorensen, E. H., Miller, K. L., and Samak, V.. 1998. “Allocating Between Active and Passive Management.” Financial Analysts Journal 54(5): 18–31.CrossRefGoogle Scholar
Steinberg, R. M., Murray, R. J., and Dankner, H.. 1993. Pensions and Other Employee Benefits: A Financial Reporting and ERISA Guide. New York: John Wiley.Google Scholar
Sternberg, E. 1994. “In Defense of Finance: Understanding Fiduciary Responsibility and Conflicts of Interest.” In The Ethics of Accounting and Finance, ed. Hoffman, W. M., Kamm, J. B., Frederick, R. E., and Petry, E. S.. Westport, Conn.: Quorum Books: 10–17.Google Scholar
Sundaramurthy, C., and Rechner, P. L.. 1997. “Conflicting Shareholder Interests.” Business & Society 36: 73–87.CrossRefGoogle Scholar
Swoboda, F. 1999. “Organized Labor to Keep ‘Scorecard’ on Pension Fund Managers.” The Washington Post. Washington, D.C. February 19: E3.Google Scholar
Teoh, S. H., and Welch, I.. 1999. “The Effect of Socially Activist Investment Policies on the Financial Markets.” Journal of Business 72(1): 35–89.CrossRefGoogle Scholar
Useem, M. 1993. Executive Defense. Cambridge, Mass.: Harvard University Press.Google Scholar
Useem, M. 1996. Investor Capitalism. New York: Basic Books.Google Scholar
Useem, M., H, E.. Bowman, J. Myatt, and Irvine, C. W.. 1993. “U.S. Institutional Investors Look at Corporate Governance in the 1990s.” European Management Journal 11(2): 175–189.CrossRefGoogle Scholar
Useem, M., and Gager, C.. 1996. “Employee Shareholders or Institutional Investors? When Corporate Managers Replace Their Stockholders.” Journal of Management Studies 33: 613–631.CrossRefGoogle Scholar
Wah, L. 1998. “The Business of Managing Outside Money Managers.” Management Review 87(4): 19.Google Scholar
Wahal, S. 1996. “Pension Fund Activism and Firm Performance.” Journal of Finance and Quantitative Analysis 31: 1–23.CrossRefGoogle Scholar
Ward, S. 1999. “Fund of Information: Passive Aggressive.” Barron’s, March 22: F3–F4.Google Scholar
Werhane, P. H. 1994. “Some Ethical Issues in Financial Markets.” In The Ethics of Accounting and Finance, ed. Hoffman, W. M., Kamm, J. B., Frederick, R. E., and Petry, E. S.. Westport, Conn.: Quorum Books: 42–50.Google Scholar
Weston, L. P. 2002. “Battling Over 401(k) Reform: After Enron’s Collapse, Lawmakers and Others Have Different Ideas to Change Pension Contribution Rules.” Los Angeles Times, January 11: part 3, page 1.Google Scholar
Williamson, C. 1999. “Religious Funds Find a Following.” Pensions & Investments 27(9): 26–27.Google Scholar