Institutional Investment in Australia: Theory and Evidence
Jennifer G. Hill
University of Sydney - Faculty of Law; European Corporate Governance Institute (ECGI)
University of Melbourne - Law School; Centre for International Finance and Regulation (CIFR)
SECURITIES REGULATION IN AUSTRALIA AND NEW ZEALAND, G. Walker, B. Fisse, eds., Oxford University Press, 1994
The emergence of institutional investors as shareholders has rendered obsolete many of the traditional assumptions about shareholders and their behaviour in relation to the affairs of the corporation. Corporate theory is, however, still coming to grips with the implications of these changes for a revised picture of corporate governance. It is unclear to what extent older models of the corporation, in which shareholders were viewed as corporate owners are being reasserted, or whether the distinctive characteristics of institutional investors require a totally new version. In addition, the potential of institutional investors to monitor corporate management is significant within the broad debate on managerial accountability and corporate regulation.
The aim of this chapter is to examine the changes wrought by the rise of institutional investors at both theoretical and empirical levels. The chapter discusses the reconception of the role and behaviour of shareholders which has occurred in corporate law. It then examines the extent to which empirical evidence in Australia supports a new role for institutional investors. Finally, the chapter examines the likelihood of greater institutional investor activism in the future in Australia, and the degree to which legal barriers may hamper the development of a more interventionist role for institutional investors.
Number of Pages in PDF File: 24Accepted Paper Series
Date posted: October 19, 2006
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