The rise of pension funds as dominant owners represents one of the most startling shifts in economic history.
Even the largest U.S. pension fund holds much too small a fraction of any one company’s capital to control it. Not being businesses, the funds have no access to in-depth commercial or business information. They are not business-focused, nor could they be. They are asset managers. Yet they need in-depth business analysis of the companies they collectively own. And they need an institutional structure in which management accountability is embedded.
I suspect that in the end we shall develop a formal business-audit practice, analogous perhaps to the financial-audit practice of independent professional accounting ...
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