This might be ignorant, but I was looking at a hedge funds portfolio and they have big holding in two companies in the microprocessor sector. If the hedge funds ownership can lead to direction of the companies boards activities, isn’t there a danger of them doing things that favor one company over another?
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So the big investment firms like say Vanguard or Blackrock own massive amounts of shares in like every single public company. However they have to make decisions that are in the best interest of their customers (who technically are the owners of the shares). A board member likewise needs to make decisions in the best interests of the company they are in the board of.
In other words. This isn’t really an issue in practical terms. There’s almost certainly some shenanigans that have happened, but that would be the exception. In the end the best interests of the shareholders is that the companies make more money, so their stock value increases.
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