Strong Managers and Passive Institutional Investors in the UK

55 Pages Posted: 28 Oct 1998

See all articles by Marc Goergen

Marc Goergen

IE Business School, IE University; European Corporate Governance Institute (ECGI)

Luc Renneboog

Tilburg University - Department of Finance; European Corporate Governance Institute (ECGI); Tilburg Law and Economics Center (TILEC)

Multiple version iconThere are 2 versions of this paper

Date Written: October 6, 1998

Abstract

To the opposite of most Continental European countries, the UK has had stringent rules on ownership disclosure for more than 50 years. However, despite this, we show that the corporate governance system in the UK still needs be improved. The way ownership of listed companies is concentrated in the hands of corporate directors and of passive institutional investors creates its own type of agency problems, i.e. high managerial discretion. Furthermore, there is mounting evidence that hostile takeovers do not necessarily discipline badly performing managers.

JEL Classification: G32, G34

Suggested Citation

Goergen, Marc and Renneboog, Luc, Strong Managers and Passive Institutional Investors in the UK (October 6, 1998). Available at SSRN: https://ssrn.com/abstract=137068 or http://dx.doi.org/10.2139/ssrn.137068

Marc Goergen (Contact Author)

IE Business School, IE University ( email )

Finance Department
Maria de Molina, 12
Madrid, 28006
Spain

HOME PAGE: http://www.ie.edu/business-school/faculty-and-research/faculty/marc-goergen/

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Luc Renneboog

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Warandelaan 2
5000 LE Tilburg
Netherlands
+13 31 466 8210 (Phone)
+13 31 466 2875 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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