In the mirror of the market: The disciplinary effects of company/fund manager meetings

Institutional shareholder activism in Nigeria: An accountability perspective

“…Institutional shareholders and shareholders' associations openly question, discuss and negotiate with management on strategic decisions at private meetings (Solomon and Darby, 2005;Roberts et al, 2006. Dialogues as a way of engagement with managers is particularly favoured by pension funds (Becht et al, 2008;Goranova and Ryan, 2014;Norli, et al, 2015, Poulsen et al, 2010Strickland et al, 1996).…”

“…This process of accountability has been observed in the relations between shareholders and management. Scholars report that management (accountors) are influenced through dialogue on corporate strategic decisions and performance by institutional shareholders (accountees) (Solomon and Darby, 2005;Roberts et al, 2006;Yuan et al, 2009). Interestingly, while these studies acknowledge the notion of accountability in shareholder-management relations, they do not use accountability theory in theorisation.…”

“…Institutional shareholders are expected to demand compliance and explanations for non-compliance. It is argued that while institutional shareholders are not there to usurp the role of monitoring agencies, they can pressurise companies to take shareholder accountability and interests more seriously (Chung and Talaulicar, 2010;Roberts et al, 2006). Roberts et al (2005;2006) find that the demand for accountability by institutional shareholders, allows for better dialogue with corporate managers on matters that are intended to create better shareholder value.…”

Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers

“…Most studies examine the use of accounting data in executive compensation contracts, recognising that accounting information is sometimes preferable to share prices for assessing management performance and captures managers' effort better (Lambert, 2001). Accounting information is used extensively for compensation (Bushman and Smith, 2001;O'Connell, 2007;Sloan, 1993) A primary purpose of UK management meetings with professional equity investors is holding company management to account and monitoring financial performance (Roberts et al, 2006). Hence, Barker (1998) finds that UK fund managers use accounting information in meetings with management to assess their performance track record, while Holland (1999) finds that financial statements are used in assessments of performance relative to previous year's objectives.…”

“…Barker et al (2012, p. 219) find that management meetings are used to 'frame or make sense of the plethora of hard data provided by the companies themselves and by analysts' and even though management discussion covers information outside the financial statements (e.g. strategic information and managers' ability to implement strategy - Glaum and Friedrich, 2006;Roberts, Sanderson, Barker and Hendry, 2006), management meetings would be less informative without audited financial statements. Non-accounting information is important to professional equity investors, but is used to add meaning to more verifiable accounting data .…”