Abstract: After Snap Inc. issued shares without voting rights, shareholders’ potential monitoring function was put into spotlight once more. Being representative of powerful shareholders, institutional investors unsurprisingly objected to Snap’s corporate governance structure. Therefore, this paper will analyse the benefits and detriments of institutional investing employing a four-dimensional framework: a) the firm itself b) shareholder(s) c) society’s welfare d) other stakeholders. This approach shows the effects of institutional investing on each dimension whilst appreciating that they are not mutually exclusive but intertwined. Consequently, this paper inquires whether the findings can be reconciled with the OECD recommendations for corporate governance. It is argued that the phenomenon of institutional investors could be a powerful asset for corporate governance, however steps need to be taken to prevent abuse by powerful shareholders to the detriment of others.
Publication Year: 2017
Publication Date: 2017-01-01
Language: en
Type: article
Indexed In: ['crossref']
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