Controlling Shareholders, Governance Environment and Institutional Investors' Effects on Corporate Governance

2011 ◽  
Author(s):  
Luo Wei ◽  
Na Zhao
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Controlling Shareholders ◽  
Governance Environment

scholarly journals Determinants of the corporate governance of Korean firms

2008 ◽  
Vol 5 (2) ◽  
pp. 15-23 ◽  
Author(s):  
Eunjung Lee ◽  
Kyung Suh Park
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Stock Exchange ◽  
The Other ◽  
Board Structure ◽  
Negative Effects ◽  
Controlling Shareholders ◽  
Empirical Results ◽  
Positive Effects ◽  
Other Hand

This paper investigates the determinants of the corporate governance of the firms listed on the Korea Stock Exchange. We find that ownerships by controlling shareholders tend to have negative effects on their corporate governance, and the negative effects are more significant on the board structure and the managerial transparency of the sample firms. On the other hand, foreign shareholders exercise positive effects while institutional investors are shown to be passive on the corporate governance issues. The empirical results suggest that investors’ or regulator’s effort to improve the corporate governance of Korean firms should be directed to the improvement of the board structure and managerial transparency

scholarly journals Corporate Governance and Stock Price informativeness: Evidence from an Emerging Market

2020 ◽  
Vol 6 (2) ◽  
pp. 593-605
Author(s):  
Muhammad Shahid Rasheed ◽  
Shahzad Kouser
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Stock Price ◽  
Emerging Market ◽  
Investor Protection ◽  
Cash Flows ◽  
Governance Mechanism ◽  
Price Informativeness ◽  
Controlling Shareholders ◽  
Stock Price Informativeness

Emerging markets usually have weaker legal and governance environment. The weaker enforcement of investor protection laws leads to a poor information environment. Using data of all the listed non-financial firms from Pakistan stock exchange (PSX), we document the relationship between corporate governance variables and stock price informativeness. The results from two-stage least squares (2SLS) reveal that controlling shareholders in the form of block holding plays an effective role in improving informativeness. Due to the presence of these block ownership, the institutional investors remain largely short term investors and act passively. This behavior of institutional investors encourages managers to extract more cash flows leading to higher synchronicity. These findings suggest market regulators develop such a corporate governance mechanism that not only ensures investor protection but also advise firms to reduce information asymmetry by better disclosure and transparency. More specifically, in the Pakistani context, traditional corporate governance mechanisms through board room regulations may not improve informativeness, and regulators need to regulate the ownership regulations, including family ownership and controlling shareholders.

Disciplinary power in corporate governance: A Foucauldian analysis of the emergence and development of proxy advisors

2021 ◽  
pp. 103237322098623
Author(s):  
Damien Lambert
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Historical Analysis ◽  
General Meeting ◽  
Global Scale ◽  
Disciplinary Power ◽  
Record Keeping ◽  
Corporate Executives ◽  
Proxy Advisors ◽  
Foucauldian Analysis

Prior research in corporate governance has extensively investigated the mechanisms through which a variety of actors (financial analysts, investment managers, shareholder activists) monitor and discipline corporate executives. However, one recently emerged actor has received little attention so far: the proxy advisory firm. Mobilising Foucault’s concept of disciplinary power, this study uses historical analysis to examine the role of proxy advisors in corporate governance. This article shows that proxy advisors actively contributed to developing and implementing disciplinary mechanisms. This involves (1) hierarchical observations of corporations and their executives on a global scale. These observations are made available to institutional investors on proxy advisors’ voting platforms which have Panopticon-like features; (2) normalisation of judgements through the provision of generic voting policies, generic voting recommendations and corporate governance ratings prepared by proxy advisors and delivered to many institutional investors; (3) ritualised examination of the performance of corporations and of their executives during the annual general meeting, including record-keeping of all past voting results.

ANALISIS PENGARUH TATA KELOLA PERUSAHAAN YANG BAIK TERHADAP RASIO PEMBAYARAN DIVIDEN

2007 ◽  
Vol 3 (1) ◽  
pp. 1
Author(s):  
Eko Budi Santoso
Keyword(s):  
Corporate Governance ◽  
Investor Protection ◽  
Dividend Payout ◽  
Controlling Shareholders ◽  
Concentrated Ownership ◽  
Good Corporate Governance ◽  
Crucial Problem

Investor protection in highty concentrated ownership as in Indonesia is a crucial problem. Expropriation tends to be high in lower investor protection because controlling shareholders can implement policies that benefit themselves at the expense of outside investors. In a high expropriation, outside investors will choose dividends rather than retained earnings.This paper examines good corporate governance as a solution.for a good investor protection in Indonesia. Using a sample of 245 firms for observdion period of 2001-200j, the results slows that stronger investor ptotection related with lower dividend payout ratio.Kqtwords : Good Corporate Governance, Dividend Payout Ratio,Investor Protection, Concentrated Ownership.

Transnational Corporate Governance: The State of the Art and Twenty-First-Century Challenges

2021 ◽  
pp. 614-646
Author(s):  
Dionysia Katelouzou ◽  
Peer Zumbansen
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Shareholder Wealth ◽  
Performance Measure ◽  
The State ◽  
First Century ◽  
Access To Health Services ◽  
Wide Range ◽  
Shareholder Wealth Maximization ◽  
Twenty First Century

This chapter explores corporate governance as a transnational regulatory field. Mirroring the rise in importance of the idea of shareholder wealth maximization as a firm’s definitive performance measure, corporate governance became a hotly contested field of competing visions of firms’ institutional and normative infrastructure in search of creating the most advantageous conditions to attract capital in volatile markets. This shift occurred at the same time that regulatory transformations in Western postindustrial societies since the early 1980s had begun to significantly shift public service provision and state-organized frameworks for old-age security guarantees and access to health services. Today’s corporate governance laboratory is a transnational force field, fought over by a host of different state and nonstate actors and also by private actors such as institutional investors. Meanwhile, following the financial crises in 2001, 2008 and 2020 and the simultaneously growing pressure on corporations from human rights, gender equality, and environmental groups, the corporate governance debate again is shifting. This time, a diversity of issues are being discussed under the corporate governance rubric, indicating a more comprehensive engagement with the firm’s purpose and functions and its societal obligations and responsibilities. Given the crucial role of firms as the residual claimants of a wide-ranging retreat of the state from its role in guaranteeing and providing a wide range of social functions, corporate governance is a mirror for the transformation of public and private power, and it has to address the twenty-first-century challenges, including global value chains and the proliferation of institutional investors, unfolding on a planetary scale.

scholarly journals Will the EU Taxonomy Regulation Foster Sustainable Corporate Governance?

2021 ◽  
Vol 13 (21) ◽  
pp. 12316
Author(s):  
Alessio M. Pacces
Keyword(s):  
Corporate Governance ◽  
Environmental Sustainability ◽  
Institutional Investors ◽  
Law And Economics ◽  
Securities Regulation ◽  
Environmentally Sustainable ◽  
Financial Products ◽  
Principal Agent Problem ◽  
Sustainability Disclosure ◽  
The Eu

EU securities regulation has established a taxonomy of environmentally sustainable activities. This article discusses, from a law and economics standpoint, the potential of this taxonomy to support sustainable corporate governance. Corporate governance can be an efficient way to channel investor preferences towards sustainability because the concentration of institutional shareholding has lowered the transaction costs of shareholder action. However, there is a principal-agent problem between institutional investors and their beneficiaries, which depends on greenwashing and undermines sustainable corporate governance. This article argues that introducing environmental sustainability into EU mandatory disclosure aligns the institutional investors’ incentives with the interest of their beneficiaries and may foster the efficient inclusion of sustainability in corporate governance. The argument is threefold. Firstly, the EU taxonomy may curb greenwashing by standardizing the disclosure of environmental sustainability. Secondly, this information may become salient for the beneficiaries as the same standards define the sustainability preferences to be considered in recommending and marketing financial products. Thirdly, sustainability disclosure prompts institutional investors to compete for sustainability-minded beneficiaries. Being unable to avoid unsustainable companies altogether, institutional investors are expected to cater to beneficiaries’ preferences for environmental sustainability using voice instead of an exit.

scholarly journals Investor Protection and Agency Theory in Corporate Governance in Pakistan

2021 ◽  
Vol 3 (1) ◽  
pp. 12-21
Author(s):  
Imtiaz Ahmed Khan ◽  
Altaf Hussain Abro ◽  
Farooque Ahmed Leghari
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Agency Cost ◽  
Corporate Structure ◽  
Minority Shareholders ◽  
Private Benefits ◽  
Controlling Shareholders ◽  
Global Trend ◽  
The Cost ◽  
Very High

The paper discusses the minority shareholders’ protection under the quantumof agency cost in corporate governance in Pakistan. The agency theory statesthat in most of the cases, the controlling shareholders and the topmanagement are normally involved in expropriating the funds of the company.This phenomenon increases the agency cost. The agency cost is directlyproportional to the cost of functioning of the company. In other words, theagency cost is inversely proportional to the profit of the company. Accordingto the agency theory, if the agency cost is decreased, the profit for investorincreases. The Pakistani corporate sector is dominated by the businessfamilies, the state and an opportunity to get the private benefits at the cost ofother stakeholders. There are the different mechanisms as discussed andapplied around the world to minimize the agency cost so as to make companyfinancially strong and better profit for the investors. In Pakistan, the agencycost is very high. Hence, there is a need to revamp the corporate governancemechanism to reduce the agency cost in order to provide a better protection tominority shareholders in a particular in the context of the global trend keepingin the view of the nature of corporate structure in Pakistan.

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