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Can anyone explain the role of institutional shareholders in CG. Is it to the members, or something relating to the company they invest in
Thanks In advance
Institutional investors as having a special responsibility to try to ensure that its recommendations were adopted by companies, stating that ‘we look to the institutions in particular . . . to use their influence as owners
to ensure that the companies in which they have invested comply with the Code’. – Cadbury Committee (1992)One of the main action points is ‘the investor institutions should use their power and influence to ensure the implementation of best practice as set out in the Code’. – Greenbury Report (1995)
Therefore the institutional investors’ potential to exert significant influence on companies has clear implications for corporate governance, especially in terms of the standards of corporate governance and issues concerned with enforcement. In relation
to institutional shareholders…
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