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Institutional investors as stewards of the corporation: Exploring the challenges to the monitoring hypothesis

Ivanova, Mila 2017. Institutional investors as stewards of the corporation: Exploring the challenges to the monitoring hypothesis. Business Ethics: A European Review 26 (2) , pp. 175-188. 10.1111/beer.12142

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Abstract

The study explores the challenges UK-based institutional investors face when trying to monitor investee companies and influence their social, environmental and governance practices. Consistent with previous research, I find that misalignment of interests within the investment chain and dispersed ownership are factors which inhibit investor activism. However, other underexplored challenges include lack of investee company transparency and investor experience in activism, as well as low client demand for engagement and internal conflicts of interest. The results contribute to the literature on institutional investor activism by using direct empirical evidence to systematically discuss the challenges to stewardship. Given the intensification of media and regulatory attention on shareholders in the post-global financial crisis era, coupled with investors’ growing awareness and practice of stewardship, the research opens new avenues for enquiry which go beyond the on-going debate about the monitoring versus short-termism roles of institutional investors.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Uncontrolled Keywords: Business ethics, Corporate social responsibility, Institutional investors, Monitoring, Shareholder activism, Active ownership, Qualitative research
Publisher: Wiley
ISSN: 0962-8770
Date of First Compliant Deposit: 27 January 2017
Date of Acceptance: 22 November 2016
Last Modified: 10 Oct 2017 20:38
URI: http://orca.cf.ac.uk/id/eprint/97808

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