Shelley, talking up his own profession, famously, if ludicrously, claimed that “poets are the unacknowledged legislators of the world.” These days, asset managers seem to be stepping up to that role, as more and more of them turn their attention to “socially responsible” investing (SRI).

Here’s another example, via the Financial Times:

Axa Investment Management will adopt one of the fund industry’s toughest policies on gender diversity next year, as part of a push by the €804bn asset manager to force businesses around the world to appoint more women to board roles.

The Paris-headquartered fund house said that from 2021 it will punish companies in developed markets that fail to appoint sufficient female directors, using its vote at annual meetings where women do not account for at least a third of board members.

Meritocracy has many gravediggers, but wait, there’s more:

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[Axa] has also pledged to use its vote — either by voting against the head of the nomination committee or against the signing off of company accounts — in emerging markets and Japan where women do not hold at least one seat or make up 10 per cent of larger boards.

So there’s one standard for (roughly speaking) “the West” and another for emerging markets — and, er, Japan.

This, of course, is rather reminiscent of Goldman Sachs’s foray into similar territory earlier this year.

CNN (January 23, 2020):

Goldman Sachs won’t take companies public anymore unless they have at least one “diverse” board member, the bank’s CEO David Solomon said Thursday….Goldman’s push for diversity will be focused primarily on women.”

The Japan Times, January 27, 2020:

Chief Executive Officer David Solomon revealed last week that starting in July the bank won’t handle initial public offerings for companies that lack either a female or diverse director. But the rule applies only to IPOs in the U.S. and Europe.

Oh.

But back to Axa and the Financial Times, and, unsurprisingly, an appearance by one of the many consultants who seem to flourish in the SRI ecosphere:

Deborah Gilshan, an independent adviser on investment stewardship and environmental, social and governance issues, said the coronavirus pandemic had reinforced the need for diverse boards.

Of course. Never let a crisis . . .

 “Boards that have not embraced robust governance, including diversity, have an added layer of risk,” she said. “With tough decisions to make, boards and CEOs need diverse teams who are able to challenge each other to get to the best outcome.”

Need? I wonder.

Reading this story has me thinking, not for the first time, what investment management companies think they are doing. I visited Axa Investment Managers’ website and discovered that they are “a global asset manager investing with a clear purpose — to make the world a better place.”

Well . . .

It’s one thing for asset managers to design SRI products for those that want them, quite another to throw their weight about “on behalf of ” investors who are interested, not in SRI, but in return, and, to be clear, there is a degree of evidence that SRI may stand in the way of return.

Axa is French, but in a recent article for Tablet, Michael Lind had a few things to say about the increasingly assertive “social” role now being played by American corporations, and not just in the investment sector.

What happens in a two-party system if the elite of one party controls the commanding heights of the economy, but power in the government is divided among both parties, thanks to the separation of powers and constitutional checks and balances? In the United States, we now know the answer. The party of the economic elite will be tempted to do an end run around electoral democracy by using its private economic power directly to impose partisan policies on society as a whole.

And:

If urban Democrats reject any pragmatic attempt to try to win the votes of deplorable voters in flyover country as immoral or just tasteless, they have a second, undemocratic option, now that they represent much of the economic elite. They can just skip the hard work of electoral politics and use the raw power of the banks and corporations they control to impose some progressive policies on their customers or borrowers directly…

[If] you cannot get the legislature or a democratically accountable government department or independent agency to pass your policy, you can try to persuade the major corporations and banks which dominate U.S. economic life to act as though your proposed policy was already the law of the land.

And, of course they won’t need (too much) persuading, as many of their managements either already subscribe to Davos “liberalism” or want the approval of those who do.

Lind makes a very strong case (the article is a must-read), but if I had to pick one area where I disagree, it would be here.

Lind:

Unlike old-fashioned labor liberalism or Marxist socialism, contemporary progressivism is a placebo version of leftism, fabricated by activists in nonprofits and university programs funded by billionaire-endowed foundations, corporations and capitalists, which does not threaten the rich and powerful because it focuses attention on cost-free “social justice” symbolism rather than on organized labor or structural economic reform.

That might be what many of those who fund it believe, but they are fools to do so. The new left may have (largely) swapped Marx’s class-based millenarianism for a form of millenarianism now defined by identity, but underneath it all a form of collective psychosis that long predates Marx bubbles away, and if those who sit in woke capital’s c-suites believe that it isn’t coming for them too, they are in for a very nasty surprise.