alt Hacker News> What does this even mean? Pension funds have a lot of board seats? I only see one person from Blackrock on their board right now.
The Board members are appointed by the Intel Corporate Governance & Nominating Committee, the chair of the committee is Barbara G. Novick, co-founder of BlackRock. The board is de-facto run by the trio of BlackRock, Vanguard and State Street, smaller investors follow their lead.
> Why would it be bad for a pension fund to have influence on running a company? Are their incentives somehow mis-aligned with other investors?
Alignment of interest is not magical: it's necessary to achieve results but it isn't sufficient. You need actual talents, vision, execution to make things happen, not just interest.
Pension funds have no vision beyond "stock go up", no strategy other than "more revenue, less costs". In the end they are roughly as good at running things as are socialist states: economy is owned by everyone so no one in particular, run by people who never proved that can run a lemonade stand. In fact a successful socialist state (if they ever existed) would be indistinguishable from a huge pension fund that swallowed the whole economy.
> The Board members are appointed by the Intel Corporate Governance & Nominating Committee, the chair of the committee is Barbara G. Novick, co-founder of BlackRock. The board is de-facto run by the trio of BlackRock, Vanguard and State Street, smaller investors follow their lead.
Thanks I learned something new today. Is Intel unique or is it common? Does Novick have this position due to pension funds specifically, or index funds in general? AIUI index funds own large stakes in many public companies so if this is true, they are all effectively run by Blackrock and Vanguard (or should be).
> You need actual talents, vision, execution to make things happen, not just interest. Pension funds have no vision beyond "stock go up", no strategy other than "more revenue, less costs".
As opposed to other investors? Outside of founder-owners you've described 99% of retail and institutional investors. Why do you believe pension funds specifically lack "talent"? As long as there is competitive pressure in every market, it doesn't matter. Some of them will be right and actually deliver better products, services, and profits.
> In fact a successful socialist state (if they ever existed) would be indistinguishable from a huge pension fund that swallowed the whole economy.
I've long believed that's the only way to make the welfare state numbers (in any country) work in the long run. Not the whole economy but like substantial proportions of the stock market. You can't tax labor to fund retirees when capital captures most of the returns and there are fewer and fewer workers. And you can't renege on promises already made to people who have been contributing throughout their careers. This can work: sovereign wealth funds are an example. Rising productivity is an updraft that pension funds should capture.