Institutional Investors In Corporate Governance Research Articles

The US Corporate Elephant

Drawn from a speech at the opening convocation at two notarial schools in Italy, this is a story of modern US corporate law. Unlike the statist nature of the corporation in many other countries, the nature of the US corporation is essentially private. It is based on state corporate law, chosen by the parties. Federal law, though regulating disclosure to public investors, mostly avoids a role in the management of the corporation. The corporation rules of state law are largely enabling, not mandatory. The parties have a wide latitude in choosing their own structures. The preeminent provider of state law is Delaware, whose preeminence comes from offering a balanced package of legislative responsiveness, legal expertise, judicial expertise and efficiency, comprehensive case law, and assurances of being non-political. Corporate law in the United States provides only basic creditor protections, assuming that most protections will come through markets and contracts. Significant emphasis is placed on fiduciary duties of corporate directors - to the corporation and shareholders. Fiduciary duties are dynamic, adapting to new governance and market circumstances. Also dynamic are other aspects of corporate law, as illustrated by the legislative, administrative and judicial responses to recent corporate and accounting scandals. Some aspects of corporate law, fundamental to the legitimacy of the corporation, remain unaddressed. The role of the corporation in politics, the place of institutional investors in corporate governance, the responsibility of the corporation for social and environmental practices not mandated by law - these are the current questions for corporate law. Will the corporation be up to the task?

The Role of Institutional Investors in Corporate Governance and Their Performance as Stock Portfolio Managers in Brazil

The aim of this paper is to analyze the influence of institutional investors (funds, banks, insurance companies, etc.) in corporate governance through stock valuation, and analyze their own performance as stock portfolio managers. The study includes 161 companies listed in BOVESPA (Sao Paulo Stock Exchange) from December/1994 to March/2000. The companies were classified according to the level of equity share held by institutional investors, and these were classified in 9 classes. The parameters used to evaluate stocks and institutional investors performance are based on CAPM (Capital Asset Pricing Model).

Interview: The Role of Institutional Investors in Corporate Governance: the case of Standard Life Investments

Interview: The Role of Institutional Investors in Corporate Governance: the case of Standard Life Investments

Institutional Investor Heterogeneity: Implications for Strategic Decisions

There has been much attention given to the growing activism of institutional investors in corporate governance. However, past research has been unable to establish a consistent relationship between institutional investors and firm behavior. This may have occurred because institutional investors have been assumed to be a homogenous group possessing the same objectives and behaviors. For a sample of 271 U.S. Fortune 500 firms for the years 1990 to 1992, we categorized the firms' institutional investors into four distinct types: pension funds, mutual funds, banks, and insurance companies. We found significantly different relationships between these categories of institutional investors and firms' strategic investments.

The Role of Institutional Investors in Corporate Governance: An Empirical Investigation

The Role of Institutional Investors in Corporate Governance: An Empirical Investigation

Shark repellents and the role of institutional investors in corporate governance

AbstractThis paper examines the role of institutional shareholders in monitoring managers when they propose antitakeover charter amendments (shark repellents). These proposals provide a rare opportunity to examine this issue since they can be adopted only by shareholder approval. We document a positive relationship between the ownership of institutional shareholders and the stock market reaction to the announcement of antitakeover amendments. This finding is consistent with the Demsetz (1983) and Shleifer and Vishny (1986) proposition that large blockholders reduce the free‐rider problem associated with monitoring managers.