Larry Beeferman

Private Equity and American Labor: Multiple, Pragmatic Responses Mirroring Labor’s Strengths and Weaknesses

This article briefly describes the recent growth of private equity, details some of the challenges such growth has posed for American labor, and outlines ways in which labor has chosen to respond. In so doing it suggests that the diverse, complicated, and practical choices labor has made to date have been shaped by the particular strengths and weaknesses of its position in American society. More particularly, these choices place the emphasis on (1) legislative change, relating mainly to tax rather than regulatory policy (labor-related or otherwise); (2) capital strategies, by which unions and pension funds engage companies in connection with corporate governance and investments that might be made in or withheld from them; and (3) high-profile campaigns relating to the reputation of private equity firms and their investee companies (as compared to traditional means of securing union recognition or exercising collective bargaining rights).

Can private pension funds be socially responsible? The US experience

For much of the relevant literature, the “Anglo-liberal” model is the least satisfactory approach to the provision of retirement pensions. This article addresses a particular aspect of the Anglo-liberal model, the investment of retirement savings in equities and other interest-bearing assets, to augment retirement benefits. The management of such investment pays insufficient attention to the externalities that may arise from corporate decision-making. Nevertheless, several US pension funds have embraced labour-friendly investment practices, which are vital to the well-being of employees, as well as the maintenance of sustainable and vibrant communities. In this respect, the Anglo-liberal model is not necessarily at variance with the demands of social justice and inclusion.

Infrastructure: Defining Matters

Abstract by Sir Rod Eddington AO, Chairman Infrastructure AustraliaInfrastructure is critical to our economy, our community and our pursuit of a sustainable environment. But what do we mean by the term “infrastructure” and do different understandings of that term confuse our attempts to decide on our future investment and development priorities?In this important paper “Infrastructure – Defining Matters”, Drs Beeferman and Wain explore how we should consider and define “infrastructure”. They focus on enterprise and people and argue that context is critical. It is an important contribution to our thinking on this crucial topic.They use both formal analysis and practical application to inform this different approach. A number of US Pension Funds contributed to the analysis via a comprehensive survey.Beeferman and Wain challenge our understanding and definition of “infrastructure”. They argue that understanding infrastructure’s important role in our society is key to informed analysis. Th at this provides a context for economic and community analysis in both developed and developing countries.This paper is a very useful contribution to an issue that is increasingly important to economies and communities around the world.

Capital stewardship in the United States: worker voice and the union role in the management of pension fund assets

This article describes US unions’ efforts at capital stewardship, that is, the investment and management of the assets accumulated in pension and other retirement plans (frequently termed ‘workers’ or ‘labour’s capital’) — on behalf of plan participants and in the interest of workers more generally. It focuses particularly on the opportunities for direct worker voice in the governance and management of those assets through workers serving as trustees of the plans. The article explores the challenges these trustees face in navigating that role in addition to their possibly conflicting role as a union member or official. It details unions’ visions for capital stewardship and their efforts to integrate trustees’ activities within the broader range of union activities. Finally, it describes ways in which unions have collaborated in support of their trustees and to develop a cross-union capital stewardship agenda. Cet article décrit les efforts déployés par les syndicats américains en matière d’encadrement du capital, c’est-à-dire des investissements et de la gestion des actifs accumulés dans les caisses de retraite et autres programmes liés aux retraites (on parle aussi de « capital des travailleurs » ou « capital des salariés ») au bénéfice de ceux qui souscrivent à ces plans et d’une manière générale des travailleurs. L’article se penche en particulier sur les possibilités offertes aux travailleurs de faire entendre leur voix directement au niveau de la gouvernance et de la gestion de ces avoirs en leur permettant de jouer le rôle d’administrateurs de ces plans. Il explore les défis auxquels ces administrateurs se trouvent confrontés lorsqu’ils sont amenés à jouer ce rôleen plus de la possibilité de conflits dans lesquels ils peuvent se trouver entraînés en tant qu’affiliés ou responsables syndicaux et décrit le regard des syndicats sur le contrôle de la gestion des capitaux et leurs efforts en vue d’intégrer ces activités d’administrateurs dans le cadre élargi des activités syndicales. En dernier lieu, il expose la façon dont les syndicats ont collaboré pour soutenir leurs administrateurs et développé un programme intersyndical de gestion du capital dans l’intérêt des travailleurs. Dieser Beitrag beschreibt die Anstrengungen US-amerikanischer Gewerkschaften im Bereich der Kapitalverwaltung, d.h., in Pensionsfonds und anderen Rentensystemen angesparte Guthaben (häufig als Arbeitnehmerkapital bezeichnet) im Namen der Versicherten bzw. Sparer und allgemein im Interesse von Arbeitnehmern anzulegen und zu verwalten. Er befasst sich besonders mit den Möglichkeiten für die direkte Mitsprache von Arbeitnehmern bei der Verwaltung dieser Vermögenswerte, wenn sie als Treuhänder fungieren. Der Beitrag untersucht die Herausforderungen für die Treuhänder, die diese Aufgabe zusätzlich zu ihrer möglicherweise damit in Konflikt stehenden Rolle als Gewerkschaftsmitglied oder -funktionär erfüllen müssen. Er beschreibt die Vorstellungen der Gewerkschaften über Kapitalverwaltung und ihre Anstrengungen, um die Aufgaben der Treuhänder in die allgemeinen Gewerkschaftstätigkeiten zu integrieren. Abschließend wird dargestellt, in welcher Weise Gewerkschaften kooperiert haben, um ihre Treuhänder zu unterstützen und eine gewerkschaftsübergreifende Agenda für Kapitalverwaltung aufzustellen.

The Materiality of Human Capital to Corporate Financial Performance

Institutional investors have become increasingly interested in analyzing long-term investment risks and rewards posed by environmental, social and governance (ESG) factors. A growing body of data and analytical tools has been developed to assist in the task, but the focus has largely been on environmental and governance matters. This paper helps fill in the gap on social factors, specifically those involving how companies manage workplace relationships, a topic often referred to broadly as human capital or human resource (HR) management. We examine both a wide range of HR policies and separately those that relate directly to employee training.Our survey of the literature on human capital found 92 empirical studies that examined the relationship between HR polices and financial outcomes such as return on equity, return on investment and profit margins. We conclude that there is sufficient evidence of human capital materiality to financial performance to warrant inclusion in standard investment analysis. However, we also find that doing so remains a challenge for a number of reasons. These range from the fact that companies do not provide investors with comparable data to a lack of consensus over which combinations of policies have the most impact on financial outcomes.