Funds flex their muscles.

Pensions & Investments, October, 1998

Public funds discover they have the clout to influence corporate boards they believe are not acting in shareholders' best interests. In July 1984, California State Treasurer Jesse Unruh asked the nation's public pension funds to support a new shareholder organization to review and possibly fight corporate management decisions that would financially hurt the funds.

At the first meeting of the public fund executives, they agreed the new organization - which would become the Council of Institutional Investors - would focus on financial, not social, issues. The council's formation was prompted by a surge of 'greenmail' activities, where corporate raiders buy up large amounts of a target company's stock and threaten a takeover attempt unless they are paid a...

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