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The Anachronism of the Voice‐Exit Paradigm: institutional investors and corporate governance in the UK

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  • Photis Lysandrou
  • Denitsa Stoyanova

Abstract

The voice‐exit paradigm continues to serve as the framework for debating key issues in UK corporate governance. That paradigm, however, has become an anachronism with the recent changes in the scale and organisational structure of the UK asset management industry. As a result of these changes the “holding” and the “selling” of shares tend to be mutually inclusive rather than exclusive acts, and the capital market's corporate governance role is now exercised more through the gravitational pull of equity trading than through the medium of hostile takeovers. If the new realities are to be correctly appraised and factored into the corporate governance codes of conduct, the voice‐exit paradigm has to be abandoned in favour of an alternative framework that is attuned to these realities. The aim of this paper is to help develop such a framework.

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  • Photis Lysandrou & Denitsa Stoyanova, 2007. "The Anachronism of the Voice‐Exit Paradigm: institutional investors and corporate governance in the UK," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1070-1078, November.
    • Handle: RePEc:bla:corgov:v:15:y:2007:i:6:p:1070-1078
    DOI: 10.1111/j.1467-8683.2007.00631.x
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    References listed on IDEAS

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    Cited by:

    1. Photis Lysandrou, 2014. "Post-Keynesian stock-flow models after the subprime crisis: the need for micro-foundations," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 11(1), pages 113-126, April.
    2. Basil Al-Najjar & Yacine Belghitar, 2014. "Do corporate governance mechanisms affect cash dividends? An empirical investigation of UK firms," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(4), pages 524-538, July.
    3. Compston Hugh, 2013. "The network of global corporate control: implications for public policy," Business and Politics, De Gruyter, vol. 15(3), pages 357-379, October.

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