Conclusion and Suggested Reforms

Abstract

Abstract In the aftermath of the takeovers boom which occurred in the UK and the US during the mid-to-late 1980s, and the scandals concerning Australian entrepreneurial companies of that period, many commentators in all three countries called for a greater involvement by institutional shareholders in corporate governance. This book has explored the topic of institutional monitoring of corporate managements in the UK and Australia. The aim of the book has been twofold: to present a picture of the extent and nature of institutional monitoring in the UK and Australia, and to analyse the possibilities for institutional monitoring in the future in each country. Any study of institutional-shareholder involvement in corporate govern ance in the UK must take account of the fact that the systems of corporate ownership and governance in the UK and the US are fundamentally different from those in most other major ‘western ‘ economies. The UK and US corporate sectors are characterized by a relatively large number of quoted companies, a liquid capital market where ownership and control rights are traded frequently, and few inter-corporate equity holdings. The corporate sectors of Germany and Japan are, in contrast, characterized by a relatively small number of quoted companies, an illiquid capital market where ownership and control rights are traded infrequently, and many inter-corporate shareholdings. The UK and US systems of corporate ownership and governance are ‘outsider ‘ systems, whilst the German and Japanese systems are ‘insider ‘ systems.