The Role Of Institutional Investors In Shaping Corporate Governance
- IJLLR Journal
- 4 hours ago
- 1 min read
Kritika Krishna Srivastava, Christ University, Pune Lavasa
"Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you'll likely find one grub; if you turn over 20 rocks you'll find two."
- Peter Lynch.1
ABSTRACT
This research paper throws light on the significant impact of institutional investors on corporate governance. It particularly describes the influence of institutional investors on corporate policies, accountability and transparency. Their large capital base compels businesses to adopt sustainable and ethical practices. The research details the evolution from passive investing to active involvement through strategies like shareholder proposals and proxy voting. However, institutional investors face challenges, including conflicts of interest, legal hurdles, and ethical issues arising from their dual role as financial stewards and activists. The study also highlights how ownership concentration and market scrutiny levels affect their ability to influence corporate governance. While there is a movement toward global convergence in governance practices, significant differences persist due to cultural, legal, and market contexts, revealing the complexity of their influence and the nuanced nature of their role in corporate governance.
Keywords: Institutional Investors, Corporate governance, compliance, Investment
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