EU corporate governance: the ongoing challenges of the 'institutional investor activism' conundrum

Sergakis, K. (2014) EU corporate governance: the ongoing challenges of the 'institutional investor activism' conundrum. European Journal of Law Reform, 2014(4), p. 728.

Abstract

Institutional investor activism seems to be the ultimate means for steady improvement in corporate governance standards, as well as a powerful tool for refocusing short-term strategies towards more sustainable and viable business projects. Although EU institutions have endeavoured over the past decade to facilitate the exercise of a wide range of shareholder rights, the impact of such regulatory initiatives remains to be seen. This paper challenges the current EU regulatory approach by supporting the idea that, while it has touched upon important topics, such as companies or financial intermediaries, hoping that the investor community will make full use of its discretion and evaluation of these actors, it has avoided resolving another crucial issue, namely, that of investor behaviour. In fact, institutional investors have been partially accused of apathy and contributing indirectly to the EU capital markets crisis. EU law thus needs to find new ways to nurture and maintain an effective willingness to engage in long-term dialogue with companies. It is therefore crucial to reassess all EU initiatives and critically challenge their efficiency in order to propose a way forward to unblock institutional investor activism and establish a veritable alignment of objectives with corporate managers.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Sergakis, Professor Konstantinos
• Authors: Sergakis, K.
• College/School: College of Social Sciences > School of Law
• Journal Name: European Journal of Law Reform
• Publisher: Eleven International Publishing
• ISSN: 1387-2370
• ISSN (Online): 1875-8274