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Governing institutional investor engagement : from activism to stewardship to custodianship?
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Johnston, Andrew, Belinga, Rachelle and Segrestin, Blanche (2022) Governing institutional investor engagement : from activism to stewardship to custodianship? Journal of Corporate Law Studies, 22 (1). pp. 45-82. doi:10.1080/14735970.2021.1965338 ISSN 1757-8426.
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Official URL: http://dx.doi.org/10.1080/14735970.2021.1965338
Abstract
Institutional investor engagement with companies is a long-standing goal of policymakers. This article evaluates whether the UK's regulatory and soft law regime is likely to orient engagement towards its goal of long-termism and sustainability. After a historical overview, it notes that institutional investors have considerable discretion in whether and how they engage with companies. Three existing forms of engagement behaviour (termed agency, trusteeship and ownership) are identified, and the article examines whether the current regime promotes or discourages them. All three may degenerate into passivity, short-term share trading or ‘bad activism’ focused on short-term value maximisation, satisfying the actors in the investment chain but failing to steer companies towards long-termism and sustainability. The article concludes that the roles of shareholders and company management should be articulated more clearly in the stewardship regime, and puts forward a custodianship model of engagement that balances managerial autonomy and accountability.
| Item Type: | Journal Article | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HF Commerce H Social Sciences > HG Finance K Law [Moys] > KN Common Law, Private Law |
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| Divisions: | Faculty of Social Sciences > School of Law | ||||||||
| SWORD Depositor: | Library Publications Router | ||||||||
| Library of Congress Subject Headings (LCSH): | Institutional investors, Financial services industry -- Law and legislation , Business ethics, Corporate governance , Corporate governance -- Law and legislation , Stockholders -- Legal status, laws, etc. , Stockholders' derivative actions | ||||||||
| Journal or Publication Title: | Journal of Corporate Law Studies | ||||||||
| Publisher: | Routledge | ||||||||
| ISSN: | 1757-8426 | ||||||||
| Official Date: | 2022 | ||||||||
| Dates: |
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| Volume: | 22 | ||||||||
| Number: | 1 | ||||||||
| Page Range: | pp. 45-82 | ||||||||
| DOI: | 10.1080/14735970.2021.1965338 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Reuse Statement (publisher, data, author rights): | This is an Accepted Manuscript of an article published by Taylor & Francis in Journal of Corporate Law Studies on 17 Aug 2021, available online: http://www.tandfonline.com/10.1080/14735970.2021.1965338 | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Date of first compliant deposit: | 1 September 2021 | ||||||||
| Date of first compliant Open Access: | 17 February 2023 |
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