Are Superannuation Funds and other Institutional Investors in Australia Acting Like 'Universal Investors'?

Abstract

This study investigates whether Australian superannuation funds and other institutional investors are concerned with the human resource management (HRM) and industrial relations (IR) practices of companies. It examines whether they use indicators of HRM or IR practices in their investment decisions and whether they attempt to influence these types of practices through other means, in the same way that investors are now doing so regarding corporate governance issues. The study finds there are embryonic signs of investors doing both. However, the ad hoc nature of engagement as well as significant information barriers, reduce the efficacy of this engagement.