Corporate Governance, Institutional Investors and Conflicts of Interest

18 Pages Posted: 25 Oct 2004

See all articles by Coral Ingley

Coral Ingley

Victoria University of Wellington - School of Management

Nicholas T. van der Walt

University of Wollongong

Abstract

The paper outlines the problems of conflicts of interest for fiduciary shareholders with respect to the stock of publicly owned companies in their portfolios and considers various approaches proposed to address these problems. The questions of whether fiduciary problems are the result of a vacuum of ownership and an imbalance of power, and the extent to which regulatory reform and shareholder activism can resolve these problems, are examined. From this analysis a framework is developed that describes the sources, outcomes and factors contributing to the effectiveness of conflict management in the context of the current investment environment. A series of recommendations for mediating conflicts of interest by changing board architectures are presented. These recommendations apply principles of participative corporate democracy to the overall governance system.

Suggested Citation

Ingley, Coral and van der Walt, Nicholas T., Corporate Governance, Institutional Investors and Conflicts of Interest. Corporate Governance: An International Review, Vol. 12, No. 4, pp. 534-551, October 2004. Available at SSRN: https://ssrn.com/abstract=608439

Coral Ingley (Contact Author)

Victoria University of Wellington - School of Management ( email )

Wellington
New Zealand

Nicholas T. Van der Walt

University of Wollongong

Northfields Avenue
Wollongong, New South Wales 2522
Australia

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