Expanded Role of Institutional Shareholders

A. Introduction Many experts have asked institutional investors to participate more and invest in companies they invest in so that no incidents such as the current financial crisis will happen again. However, from the perspective of corporate governance, it is expected that there will be too many institutional shareholders. In order to answer this question, the following discussion will first describe the future obligations of institutional investors currently under discussion and then analyze whether these proposals are reasonable or not.

The role of institutional shareholders in overseeing governance practices is the subject being continuously discussed about their effectiveness and appropriateness. As the owner of the company, shareholders have certain rights including the right to appoint the board of directors. As a representative of shareholders, the board of directors is directly responsible for supervising the management of the company and its performance. If shareholders believe that the responsibilities of the Board of Directors are not fulfilled, that is, if the shareholders believe that the shareholders are dissatisfied with the performance of the Board of Directors, the possibility of shareowner behaviorism, in particular institutional investors 'shareholders' behaviorism emerges.

Corporate governance is a system that guides and controls the company. The Board of Directors is responsible for the governance of the company. The role of shareholders in governance is to appoint directors and corporate auditors and to establish an appropriate governance structure. However, good governance can have broader impacts on non-listed sectors. This is basically to improve the transparency and accountability of existing systems. One of the interesting developments in the past few years is how to use the Corporate Governance tab to explain governance and accountability issues outside the corporate sector. Corporate governance in the UK is more likely to cause confusion as it is being established and developed to address the governance of listed companies rather than targeting all types of organizations that may have different accountability structures There is a possibility of misunderstanding.

Shareholders' behaviorism is starting to play a role in restructuring the corporate governance of global companies. Institutional investors and financial intermediaries are actively serving shareholders in developed countries and developed countries. In general, shareholders' behaviorism has become one of the most important and controversial issues of the 21st century. Due to the recent collapse of large international organizations, it is said that the problem of shareowner's radicalism (the opposition of shareholders to the purpose of management) is emerging, and in theory it is called corporate governance. Currently, corporate governance refers to the structure and processes of direct and controlling companies.