Investor Democracy

Economic decisions are often delegated to financial intermediaries. Yet beneficiaries rarely have meaningful influence over how their capital is invested. This creates a democratic deficit, especially when investment choices involve trade-offs between financial returns and social impact. We study how informed social preferences can be revealed in the field using deliberative democracy. Partnering with a large Dutch pension fund, we conduct two field experiments that combine a deliberative mini-public with a binding maxi-public vote. In the mini-public, 49 randomly selected members participate in a three-day, in-person process with structured peer deliberation and balanced expert briefings on sustainable investing. After deliberation, participants formulate and vote on recommendations for the pension board. Deliberation increases self-reported investment knowledge. Consistent with this increase, participants' motivations shift from deontological, procedure-based reasoning toward a more consequentialist focus on societal impact. This shift leads participants to recommend expanding impact investing, while no majority supports increasing divestment. Because expanding impact investing may involve lower expected returns and higher risk, the board then tests whether this recommendation aligns with broader member preferences. In a binding vote among 13,619 members, participants are explicitly informed about these trade-offs. A plurality supports expanding impact investing. The board subsequently commits to increasing impact investments by €300 million to €1.2 billion. Together, these results show how investor democracy, implemented through a mini-public paired with a binding maxi-public vote, can elicit informed social preferences in real-world financial intermediation and translate them into consequential investment choices.