Responsible ownership, shareholder value and the new shareholder activism
AbstractIn this paper we use interview data to explore the new shareholder activism of mainstream UK institutional investors. We describe contemporary practices of corporate governance monitoring and engagement and how they vary across institutions, and explore the motivations behind them. Existing studies of shareholder activism mainly assume that it is motivated by a desire to maximise shareholder value, and we find some evidence both of this and of alternative political/moral motivations related to ideas of responsible ownership. We conclude, however, that in the current situation both these act primarily as rationalisations rather than as genuine motivators. The main driving force behind the new shareholder activism is the institutions own profit maximisation and the need to position themselves against competitor institutions in the context of political and regulatory changes that have significantly changed the non-financial expectations of their clients.
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Bibliographic InfoPaper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp297.
Date of creation: Dec 2004
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corporate governance; institutional investors; shareholder value; stock market;
Find related papers by JEL classification:
- G3 - Financial Economics - - Corporate Finance and Governance
- G2 - Financial Economics - - Financial Institutions and Services
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
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