Problems and Limitations of Institutional Investor Participation in Corporate Governance

Webb, Robert I.; Beck, Matthias; McKinnon, Roddy

doi:10.1111/1467-8683.00302

Cited by 83 publications

(39 citation statements)

References 17 publications

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“…This may lead institutional investors to be positively associated with internationalization of SMEs. Additionally, Webb, Beck, and Mckinnon (2003) explain that owing to the potentially negative impact of a high selling price and resulting capital gains, their big investments limit institutional investors' capability to trade their numerous investments actively. Hence, the viewpoint and interests of institutional investors make them appropriate shareholders (Chung et al, 2005).…”

Section: The Interaction Impact Of Institutional Ownership and Fammentioning

confidence: 99%

The Impact of Ownership Structure on Internationalization : An Empirical Study of Korean SMEs

Cho¹,

Lee²

2017

Glob Bus Financ Rev

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Section: The Interaction Impact Of Institutional Ownership and Fammentioning

confidence: 99%

The Impact of Ownership Structure on Internationalization : An Empirical Study of Korean SMEs

Cho¹,

Lee²

2017

Glob Bus Financ Rev

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“…However, financial institutions have informational and analytical advantages in monitoring management (Webb et al, 2003), and in the UK and other market-based governance jurisdictions, it has been recommended that institutional investors become more active stewards of companies rather than passive traders (Kay, 2012).…”

Section: The Corporate Governance Role Of Boards In Decision-makingmentioning

confidence: 99%

Board composition and diversification decisions of UK listed companies: a panel data analysis

McCann

2016

IJBGE

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Dr Michael McCann is a senior lecturer in Economics at Nottingham Business School. His research primarily concerns corporate governance, acquisitions and strategic decisionmaking. The particular focus is the role of the market for corporate control in corporate governance. He utilises both quantitative and qualitative research methods to analyse various aspects of the acquisition process and its aftermath. The panel data analysis integrates changes in board composition and its dynamic effect on the extent of diversification. We find that increased board independence influences the extent of both unrelated and related diversification. Neither institutional representatives nor extraindustry interlocking directors influence the extent of diversification in ways which promote shareholders' interests. The findings supports corporate governance policy promoting board independence. In contrast, these findings suggest extending the involvement of institutional investors to board representation may not mitigate agency problems in large companies.

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“…There is no evidence that can prove that these bills can change its policies, improve the corporate performance, and increase the value of the company. Webb (2003) argues that institutional investors mostly focused on short-term performance index of the company. If institutional investors get involved in corporate governance and pressure the management pressure, it is easy to make the management have hostility and cause the various problems of company management.…”

Section: The Effect Of Institutional Investors For Participationmentioning

confidence: 99%

Impact Of Shareholder Activism On Corporate Governance In China: Evidence From Companies Listed On The Shenzhen Stock Exchange “A” Shares

Huang

Xie

2016

ESJ

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This paper investigates impact of shareholder activism on corporate governance in China. The separation of ownership and management of companies often to some extent causes agency problems between shareholders and company managers. In Western countries, shareholders of a company usually actively participate in the company's management and closely monitor management issues in order to enhance the company's performance. At present, China's securities market, along with institutional investors, is undergoing a rapid development. Nevertheless, problems in corporate governance among listed companies have been hindering the development of capital markets in China. Meanwhile, institutional investors have experienced significant growth. Moreover, national policies, as well as the split-share structure reform, further encourage the growth of institutional investors and their active participation in corporate governance for further promotion of the development of capital markets. Making empirical contribution, this paper tests how effective institutional investors participate in the governance of listed companies on the Shenzhen Stock Exchange (SZSE) "A" Shares after share reform in China. Results of empirical estimation indicate that China's institutional investors do participate in corporate governance, but only to some extent. Positive behaviors of Chinese shareholders have played a favorable role in improving corporate governance.

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Problems and Limitations of Institutional Investor Participation in Corporate Governance

Cited by 83 publications

References 17 publications

The Impact of Ownership Structure on Internationalization : An Empirical Study of Korean SMEs

The Impact of Ownership Structure on Internationalization : An Empirical Study of Korean SMEs

Board composition and diversification decisions of UK listed companies: a panel data analysis

Impact Of Shareholder Activism On Corporate Governance In China: Evidence From Companies Listed On The Shenzhen Stock Exchange “A” Shares

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