Stewardship Codes and the Role of Institutional Investors in Corporate Governance: An International Comparison and Typology

Klettner, A

Stewardship Codes and the Role of Institutional Investors in Corporate Governance: An International Comparison and Typology

Klettner, A

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Publisher:: WILEY
Publication Type:: Journal Article
Citation:: British Journal of Management, 2021
Issue Date:: 2021-01-01

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Field	Value	Language
dc.contributor.author	Klettner, A https://orcid.org/0000-0002-2838-9383
dc.date.accessioned	2021-09-13T03:40:02Z
dc.date.available	2021-09-13T03:40:02Z
dc.date.issued	2021-01-01
dc.identifier.citation	British Journal of Management, 2021
dc.identifier.issn	1045-3172
dc.identifier.issn	1467-8551
dc.identifier.uri	http://hdl.handle.net/10453/150510
dc.description.abstract	Over recent decades, share ownership of listed companies has concentrated into the hands of large institutional investors, challenging the traditional agency theory view of corporate governance as a mechanism to resolve the separation of ownership and control. Alternative theories have emerged to explain the role of institutional investors in corporate governance, each with a slightly different view on the motivations of these powerful shareholders and the nature of their relationship with corporate management. These theories share a common thread – the concept of investor stewardship – yet each theory applies it differently. This paper explores whether institutional investors should act primarily as stewards of their investee companies (agency theory), stewards of beneficiaries’ funds (agency capitalism), stewards of a market/economy (universal ownership) or stewards of society (stakeholder theory), and whether this varies internationally. Through an analysis of national stewardship codes, the paper determines which of these theoretical approaches are most strongly reflected in emerging stewardship policy across the world. It presents a typology of stewardship codes as a framework for understanding cross-country variation in investor stewardship policy. Stewardship codes influence the shareholder–manager relationship and can encourage integration of wider economic and societal concerns into corporate finance.
dc.language	English
dc.publisher	WILEY
dc.relation.ispartof	British Journal of Management
dc.relation.isbasedon	10.1111/1467-8551.12466
dc.rights	info:eu-repo/semantics/openAccess
dc.subject	1503 Business and Management, 1505 Marketing
dc.subject.classification	Business & Management
dc.title	Stewardship Codes and the Role of Institutional Investors in Corporate Governance: An International Comparison and Typology
dc.type	Journal Article
utslib.for	1503 Business and Management
utslib.for	1505 Marketing
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Management Discipline
utslib.copyright.status	open_access	*
dc.date.updated	2021-09-13T03:40:01Z
pubs.publication-status	Published

Abstract:

Over recent decades, share ownership of listed companies has concentrated into the hands of large institutional investors, challenging the traditional agency theory view of corporate governance as a mechanism to resolve the separation of ownership and control. Alternative theories have emerged to explain the role of institutional investors in corporate governance, each with a slightly different view on the motivations of these powerful shareholders and the nature of their relationship with corporate management. These theories share a common thread – the concept of investor stewardship – yet each theory applies it differently. This paper explores whether institutional investors should act primarily as stewards of their investee companies (agency theory), stewards of beneficiaries’ funds (agency capitalism), stewards of a market/economy (universal ownership) or stewards of society (stakeholder theory), and whether this varies internationally. Through an analysis of national stewardship codes, the paper determines which of these theoretical approaches are most strongly reflected in emerging stewardship policy across the world. It presents a typology of stewardship codes as a framework for understanding cross-country variation in investor stewardship policy. Stewardship codes influence the shareholder–manager relationship and can encourage integration of wider economic and societal concerns into corporate finance.

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http://hdl.handle.net/10453/150510