Education, Science, Technology, Innovation and Life
Open Access
Sign In

Promoting the Institutional Investors' Engagement of Corporate Governance in Emerging Countries—From the Perspective of the Revision of the UK's Stewardship Code

Download as PDF

DOI: 10.23977/ferm.2022.050311 | Downloads: 33 | Views: 666

Author(s)

Lin Yang 1

Affiliation(s)

1 School of Humanities and International Education Xi'an Peihua University, Xi'an, Shaanxi, 710125, China

Corresponding Author

Lin Yang

ABSTRACT

In the last three decades, we have witnessed a meteoric growth in the presence of institutional investors in global equity(and bond) markets, and a subsequent change in investment practices. This gave rise to questions about whether institutional shareholders, should be more engaged with long term company strategies and do more to challenge boards to take timely action to avoid corporate failures. Public and/or private (policy) actors in 20 jurisdictions, on 6 continents across the world, including the UK, have introduced Stewardship Codes(SC) or similar initiatives to counteract the perceived investor short-terrorism and improve the way institutional investors discharge their stewardship responsibilities, while the International Corporate Governance Network (ICGN) has also introduced global stewardship principles. Yet, changing market practices and structures raise doubts about the effectiveness of these regulatory initiatives. In order for this regulatory system to fully function, SC should be introduced to different countries and applied more efficiently. With this background, this essay will first focus on the introduction of the revision of the UK's stewardship code. It will then point out the alternative approaches to improve the institutional shareholder's engagement. This will be followed by the developing countries' corporate governance regime in institutional shareholder' issue. Finally, it will stress the policy approaches to promote institutional investors' engagement in emerging countries.

KEYWORDS

Stewardship Code, Corporate Governance, ESG, Institutional Investors

CITE THIS PAPER

Lin Yang, Promoting the Institutional Investors' Engagement of Corporate Governance in Emerging Countries—From the Perspective of the Revision of the UK's Stewardship Code. Financial Engineering and Risk Management (2022) Vol. 5: 90-97. DOI: http://dx.doi.org/10.23977/ferm.2022.050311.

REFERENCES

[1] Bonacchi M, Klein A, Longo S, et al. The Effects of Credible Voluntary Disclosures: Institutional Investor Engagement and Investees’ ESG Performances[J].European Corporate Governance Institute-Law Working Paper, 2022 (620).
[2] Klettner A. Stewardship codes and the role of institutional investors in corporate governance: An international comparison and typology[J].British Journal of Management, 2021, 32(4): 988-1006.
[3] Chiu, I. and Katelouzou, D.From Shareholder Stewardship to Shareholder Duties: Is the Time Ripe?[J].SSRN Electronic Journal, 2016.
[4] Knapp V. Sustainable Corporate Governance: A Way Forward?[J]. European Company and Financial Law Review, 2021, 18(2): 218-243.
[5] Sakawa H, Watanabel N. Institutional ownership and firm performance under stakeholder-oriented corporate governance[J]. Sustainability, 2020, 12(3): 1021.
[6] Al-Abdin, A., Roy, T. and Nicholson. Researching Corporate Social Responsibility in the Middle East: The Current State and Future Directions[J].Corporate Social Responsibility and Environmental Management, 2017, 25( 1), pp.47-65.
[7] Reisberg, A. THE UK STEWARDSHIP CODE: ON THE ROAD TO NOWHERE?[J]. Journal of Corporate Law Studies, 2015,15(2), pp.217-253.
[8] McKersie, M. The Stewardship Code and the pattern of engagement by institutional shareholders with listed companies[J].Capital Markets Law Journal, 2010, 5(4), pp.439-442.
[9] Katelouzou D, Puchniak D W. Global shareholder stewardship: complexities, challenges, and possibilities[J]. Cambridge University Press, Forthcoming, 2021.
[10] Reisberg, A. The notion of stewardship from a company law perspective[J].Journal of Financial Crime,2011,18(2), pp. 126- 147.
[11] Almadi, M. (2015). Organizational Governance, Board of Directors, and the Influence of Context in Emerging Markets[J]. International Journal of Business and Management,10( 12), p. 116.
[12] Fenwick, M. and Vermeulen, E.Institutional Investor Engagement: How to Create a "Stewardship Culture"[J]. SSRN Electronic Journal, 2018.
[13] Katelouzou, D. and Siems, M. Disappearing Paradigms in Shareholder Protection: Leximetric Evidence for 30 Countries, 1990-2013[J].SSRN Electronic Journal, 2015.
[14] Lim, E.Controlling shareholders and fiduciary duties in Asia[J].Journal of Corporate.Law Studies,2017,18( 1), pp. 113- 150.
[15] Min Foo, L.Stakeholder engagement in emerging economies: considering the. strategic. benefits of stakeholder management in a cross‐cultural and geopolitical context. Corporate Governance[J]. The international journal of business in society,2017,7(4), pp.379-387.  
[16] McNulty,T. and Nordberg, D. Ownership, Activism and Engagement: Institutional. Investors as Active Owners[J]. Corporate Governance: An International Review, 2015, 24(3), pp.346-358.

Downloads: 14837
Visits: 316894

All published work is licensed under a Creative Commons Attribution 4.0 International License.

Copyright © 2016 - 2031 Clausius Scientific Press Inc. All Rights Reserved.