The 2006 Moskowitz Prize for Socially Responsible Investing has been awarded to Brad Barber, professor of finance at the University of California, Davis, for his work on shareholder advocacy. The prize is awarded each year by the University of California, Berkeley, Haas School of Business for the paper judged to be of most “practical significance” to socially responsible investors.
In his paper, Monitoring the Monitor: Evaluating CalPERS’ Activism, Barber followed the giant public pension fund CalPERS as it pressed companies it has invested in to change their businesses in ways deemed to enhance shareholder value.
Barber draws a distinction between “shareholder activism” and “social activism.” He explains that there is an inherent conflict of interest between managers of a corporation and that company’s shareholders. In shareholder activism, he says, “large institutions can try to solve that problem by monitoring these corporations’ actions and in particular the actions of managers to make sure they’re acting in the best interests of shareholders.”