Coordinated Engagements

We study coordinated engagements by a prominent international network of long-term shareholders cooperating to influence firms on environmental and social issues. We find leadership is decisive in collaborative engagements: a two-tier engagement strategy, combining lead investors with supporting investors, is effective in successfully achieving engagement goals, and is followed by improved target performance and increased investor fund flows. An investor is more likely to lead collaboration when it has higher stakes in and exposure to the target, formal engagement processes, and broader participation in collaborative initiatives. Success rates are elevated when lead investors have superior information and a credible reputation.