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This study aims to examine the role of institutional investors (using proxy voting and voice) in influencing the decisions and governance landscape of their investee firms.

The authors use exploratory research design due to the underdevelopment of the problem phenomena, especially in the context of emerging economies. Using asset management companies (AMC) as a proxy for institutional investors, the authors use a multiple case study design. This design was relevant in the setting as it assured triangulation by studying the same phenomenon across firms with distinct characteristics. The authors sourced the data for the multiple cases from primary sources (such as semi-structured interviews) and secondary sources (such as official Webpages and social media pages of AMC and examination of archival documents). Finally, the authors used qualitative content analysis to analyse the data.

The findings suggest that shareholder activism by institutional investors has grown in India over the period, particularly in matters related to corporate governance, related party transactions, remuneration and compensation. These AMC in India use proxy voting services for advising on voting resolutions in their investee companies. However, voting by AMC does not generally affect resolution results. This is particularly true in the presence of a high concentration of promoter holdings in investee companies.

The study is a novel attempt in an emerging market context to explore the role of institutional investors in influencing firm decisions and improving the governance landscape of the company using proxy voting and voice. This is especially important as the institutional framework in emerging markets is not as strong as in developed markets.

This paper aims to explore the voting recommendations made by proxy advisory firms in India by descriptively analyzing the “Vote Against” recommendations made by two proxy advisory firms for shareholder resolutions for the listed Indian firms. It also empirically tests the relationship between proportion of “Vote Against” recommendations and the parameters which are proved to be influencing corporate governance practices of a firm.

Empirical analysis of proxy voting recommendations for a sample of 77 listed non-financial Indian firms across four financial years.

The paper finds that two categories of shareholders proposals, “reappointment of non-executive directors” and “remuneration of statutory auditors”, account for 83.5 per cent of “Vote Against” recommendations. Further, there are significant differences in the proportion of “Vote Against” recommendations based on the type of “controlling ownership” of the firms. The regression analysis indicates that the relationships between proportion of “Vote Against” recommendations and determinants of corporate governance practices are mostly in line with the a priori expectations, as far as ownership is concerned but requires further analysis for other parameters.

Exploratory nature of this paper opens up new research issues in the upcoming Indian Proxy advisory industry. It suggests that the future research should consider the controlling ownership as an important parameter while analyzing the proxy firm recommendations.

Indian proxy advisory industry requires lots of nurturing from the regulators, and this exploratory study provides the basic insights in this regard. It also highlights potential corporate governance issues where the regulators need to tighten the corporate governance norms, like reappointment of independent directors and appointment of statutory auditors.

Pioneering Study in understanding the proxy advisory voting recommendations in an emerging market.

Building on the institutional theory perspective on corporate governance change and based on interviews with investor relations (IR) managers in large Japanese companies, this study aims to examine Japanese IR managers’ perceptions of the influence of foreign shareholders on Japan’s corporate governance reform and stakeholder-based system. The paper examines tensions, conflicts and collaborations among different stakeholders involved in corporate governance changes in Japan, especially in the areas of firm ownership, employment relations and boards of directors. The paper explains why convergence does not happen in some large Japanese companies by investigating Japanese managers’ responses to and perceptions of foreign shareholders in multiple corporate contexts.

The author conducted in-depth interviews with ten IR managers at large, listed Japanese companies in Kyoto and Tokyo and two managers at foreign investment banks in Tokyo, between 2018 and 2021.

This paper explores five themes that emerged from my interviews: Chief executive officers’ (CEOs’) mixed perceptions of foreign investors, the effectiveness of CEO compensation and outside directors, managers’ reluctance to accept stock price-driven business strategies, foreign investors’ engagement vs investments in index funds and gender patterns, including the effectiveness of token female outside directors. The Japanese companies the author looked at incorporated foreign shareholders as consultants and adopted a few major shareholder-based customs, such as CEOs communicating with investors, having outside directors, increasing CEO compensation and slimming down unprofitable parts of the business via restructuring and downsizing. Simultaneously, they resisted a few major shareholder-based practices. Foreign shareholders’ pressure revealed tensions and contradictions between the Japanese stakeholder system and shareholder primacy-based customs.

This paper is one of the few qualitative studies that explores Japanese IR managers’ responses to and perceptions of foreign shareholders in corporate governance reform, with a particular focus on ownership, employment relations and board members. This paper provides examples of tension, conflict and cooperation between Japanese managers and foreign investors, as seen through the eyes of Japanese IR managers. Examining changes in Japan’s stakeholder-based system of corporate governance reform enables us to better understand the processes by which, with vigorous pressure from government and foreign shareholders, a non-western country like Japan may adopt shareholder-based customs and how such a change may also lead to institutional changes.

The purpose of this paper is to explore how shareholder engagement on environmental, social, and governance (ESG) issues is informally exercised by a large global institutional investor with locally embedded, geographically remote firms. This field is still a new area of research due to a scarcity of data, and because ordinarily, private engagement activities are conducted confidentially. Therefore, the paper aims to fill this gap in the literature by studying the private corporate engagement activities of a large UK-based institutional investor on ESG issues with Japanese investee firms in order to achieve a greater understanding of the under-researched area of corporate social responsibility.

The authors employ a multi-method approach to analyse engagement activities by the institutional investor. The authors have obtained a unique data set of the institutional investor’s engagement activities. The institutional investor is UK-based, has a long history of active engagement, and is considered one of the oldest and largest specialists in responsible investment. Further, the authors have conducted several in-depth interviews with a UK-based ESG service provider as well as one of the largest Japanese trust companies.

First, it is found that main target firms of engagement activities are large firms with global operations, and that corporate governance issues are the most important engagement topic in Japan. Second, in trying to effectively exercise voice across societies, engagement activities are conducted with geographically remote target firms on various ESG agendas in a self-enforcing, face-to-face, and sometimes collective manner. Finally, this study argues for the gap between the asset manager’s motivation to engage and local target firms’ readiness to respond due to corporate organisational and language issues.

The authors contribute to social responsibility literature by focusing on the role of global investors in Japan to diffuse global standards. This area has been largely neglected in this stream of literature, despite the increasing presence of foreign investors in Japan. This is one of the first attempts to analyse a global investor’s engagement strategies with one specific country outside of the USA and Europe. Further, within the literature on shareholder engagement, this is the first paper that focuses on the means of engagement activities and the responses by target firms.

To demonstrate how the Society of Jesus (Jesuits) in the United States through the “National Jesuit Committee on Investment Responsibility” played a significant role as a socially conscious institutional and religious investor in influencing Chevron’s Human Rights Policy 520 and to analyze the factors that contributed to a successful shareholder engagement with the company.

Case study based on firsthand information.

1. Our conclusion offers support for Allen et al.’s (2012) conclusion of legitimacy (credibility) being the dominant force in a successful engagement.

2. We found that coalition-building is a significant moderating variable in increasing shareholder salience. This finding contradicts the study by Gifford (2010).

Our conclusion offers support for Allen et al.’s (2012) conclusion of legitimacy (credibility) being the dominant force in a successful engagement.

We found that coalition-building is a significant moderating variable in increasing shareholder salience. This finding contradicts the study by Gifford (2010).

The chapter is based on the actual process of shareholder engagement with Chevron Corporation that led to the human rights policy and is written mainly based on firsthand information.

The web offers a large and ever expanding range of information sources on the popular and widely researched topic of corporate governance. This paper aims to introduce keys sites of quality and relevance to those interested in researching the field of corporate governance using freely available web resources. It will also aims to prove useful to librarians who wish to develop web‐based subject pathfinders in this field or who want simply to connect with and build their knowledge of major topics and participants in the field of corporate governance.

By way of introduction important or groundbreaking works in the corporate governance literature are identified and cited in the paper to place selected web sites within the context of recent and historic developments in the area of corporate governance. A wide range of web‐based sources were consulted and critically evaluated in the study.

The result of this work is a significant sampling of quality web‐based information sources with evaluative annotations.

Given the recent explosion in information resources available on the topic of corporate governance, this paper will prove especially timely and useful to anyone interested in accessing and interacting with quality information on the free web from a wide range of significant players and stakeholders in the corporate governance arena.

The purpose of this paper is to ask the following question: is there a link between being politically connected, the quality of governance and the company’s ownership structure?

The author then examined Canadian companies from the S&P/TSX index for the year 2015.

Political connectedness is significantly associated with lower quality of governance in relation to shareholders’ rights; ownership concentration is associated with lower quality of governance in relation to the overall governance, board of directors, shareholders’ rights and compensation structure indices; ownership structure does not mediate the relationship between political connections and quality of governance; and number of political connections through the executive is associated with less risky governance practices in relation to compensation structure; in other words, when members of the executive are politically connected, the firm adopts better compensation practices.

The time limitation is the main weakness of this study and probably the cause of observed mitigated results.

The author hope that the results will inform regulators on the need not only to further regulate the business-politics relationship, but also to consider the specific traits of concentrated ownership companies and the most critical aspects of corporate governance in politically connected firms, such as shareholders’ rights, particularly those of minority shareholders. For example, an intriguing case to investigate in the Canadian context would be Pierre Karl Péladeau’s foray into Quebec politics and the controversy ignited by his political bid in light of his position as majority shareholder (75 percent) in communications giant Quebecor Inc.

In fact, the results shown that concentrated ownership firms have lower governance quality than non-concentrated ones. Furthermore, in a concentrated ownership context, the minority shareholders’ rights could be threatened. In this sense, the results also shown that shareholders’ rights seem to be the most critical governance issue for the politically connected Canadian firms. These results are therefore the indication that Canadian financial market regulators must take action about politically connected and concentrated ownership firms in order to further protect minority shareholders’ rights.

This study makes a double theoretical contribution by enriching the literature on corporate governance and by providing one of the first investigations into the direct and comprehensive relationships between political connections, governance and ownership structure.

Purpose – This chapter discusses the role that indices of corporate governance have had in comparative corporate governance research.

Design/Methodology/Approach – The authors begin with a short discussion of what corporate governance is and its main debates. Then, the authors review the main indices (which are also summarized in Table 1), highlighting their strengths and limitations as well as describing some of the findings that emanate from them. Then, the authors discuss the methodological and conceptual assumptions of corporate governance indices that may compromise their construct validity. The authors conclude with some encouraging suggestions for key methodological and research design issues to take into account in future comparative corporate governance.

Findings – Many methodological issues in the measuring and analysis of (comparative) corporate governance remain to be solved. First, although corporate governance practices have a direct effect on some of the firms’ strategic decisions, they may only have an indirect effect on firm performance. Second, it is possible that, after all, causality goes the other way around, i.e., the firm performance explains the adoption of certain governance practices. Third, there are also important challenges in measuring firm financial performance as well as measuring and comparing corporate governance effectiveness between firms from different governance settings.

Originality/Value – This is one of the first chapter to give an overview of the most current corporate governance indices, both academic and commercial, to discuss their underlying assumptions and limitations, and, finally, to provide specific directions for future research regarding comparative corporate governance.

Action from activists is at the origin of many initiatives that end up injecting moral concerns into the way companies operate. In such instances, activists function as moral entrepreneurs that lastingly change the definition of what constitutes morally acceptable corporate behavior. Yet, in order to have such a lasting effect on companies, activist efforts need to pass through multiple stages that deal with both the effective mobilization of their own constituents and the triggering of corporate responses that can induce broader change in the economy. In the present chapter, the authors study how local shareholder activists initiated and helped sustain the process that led to the establishment of active ownership in Switzerland between 1997 and 2011. Active ownership refers to the active engagement of shareholders with firms to push them toward considering environmental, social, and corporate governance criteria in their decision-making. The case illustrates the processual nature of moralizing dynamics initiated by activists and emphasizes the long-term and cumulative nature of many moralization projects.

This study aims to examine institutional ownership of companies that go public with dual-class share structures.

Several recent studies have discussed the potential advantages and disadvantages of the dual-class structure, which allows founders and insiders to maintain control of the firms they created through superior voting rights. Institutional investors oppose the dual-class structure, arguing that inferior voting rights make it difficult to respond to poor governance or performance. Previous research has shown the early value-added to the dual-class firm declines through time. This study examines institutional ownership of dual-class companies through time and compares institutional investments in initial public offerings with perpetual superior-class structures versus those with provisions to sunset those shares to one-share, one-vote structures.

Evidence suggests that institutional investors view perpetual dual-class structures as potentially riskier in terms of poor governance or performance and prefer dual-class companies with sunset provisions.

This study suggests that founders and insiders should consider either the dual-class structure with a sunset provision or if they choose the perpetual dual-class, it should include some type of event-driven safeguards.