Institutional investor

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Institutional investors as stewards

Regulation by Simon Wong, Northwestern University School of Law,

Editor’s Note: Simon Wong is Managing Director at Governance for Owners and Adjunct Professor of Law at Northwestern University School of Law. This post is based on an article that recently appeared in the Butterworths Journal of International Banking and Financial Law.

As the dominant owners of listed companies in many developed markets, institutional investors have been under increasing pressure to act as responsible shareholders. In the UK, where institutions own more than 70% of the stock market, a Stewardship Code has been developed to encourage pension funds, insurance companies, and their asset managers to monitor and engage investee companies actively with the view to protect and enhance shareholder value (see Figure 1). Similar efforts are underway in Canada, France, the Netherlands, and other markets.

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