It's a common argument amongst some institutional investors that concerns about investee companies are best expressed privately. This is an argument that has also been deployed against disclosure of voting records. I have always felt that it is self-serving, but I increasingly think it is also just wrong.
By failing to speak out publicly, investors can create the impression that there are no concerns at a given company. It's the self-censorship of dissent and can therefore lead to a public assumption of apparent consensus (I'd almost go as far as to say it's analogous to banning shorting). It's a bit like a bubble in positive sentiment, without publicly expressed concerns it may simply grow bigger.
It's notable that Cass Sunstein has been making the argument for years that it's important to express dissent. And obviously in corporate governance there's a clear consensus that boards need to exhibit the ability to facilitate open challenge. Yet for some reason when it comes to investor dissent it's almost a point of principle of some to not speak out - even where publicly expressed dissent may help others find their voice.
Anyway, I'm going to start this soon. Expect to see a few excerpts appear...
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