Investor Engagement Investors and Management Practice under Shareholder Value

Author: Roderick Martin; Peter D. Casson; Tahir M. Nisar
Publisher: Oxford University Press
ISBN: 9780199202607
Published In: July 2007
Format: Hardback , 240 pages
Jurisdiction: U.S. ? Disclaimer:
Countri(es) stated herein are used as reference only

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Links investor behaviour to finance, corporate governance, and management practice
Consideration given to the IT, biotech, and pharma industries
Looks at institutional investors and private equity firms
Important implications for debates about global convergence of corporate governance systems

The growth of shareholder value has been a major change in Western economies since the 1980s. This growth has reignited debates concerning relations between investors and managers. This book argues that investors are more than passive providers of finance, on whose behalf managers seek to maximize shareholder returns. Instead, many investors directly influence management practice, through investor engagement. The book examines the role of institutional investors and private equity firms, two types of investors with overlapping but different reasons for engagement. Questions addressed include: What are the incentives, and disincentives, for investment engagement? How is investor engagement organized? What areas of management practice are of particular concern to investors? The discussion shows in detail how private equity firms play a major role in developing new companies, beyond the provision of finance, especially in the IT, biotechnology, and pharmaceutical sectors.

The discussion is primarily based on British and US research. The debate has wider international relevance, because there are strong pressures for establishing shareholder value as the international 'norm' for systems of corporate governance. Following a detailed discussion of Germany, the authors conclude that there is no inevitable trend to shareholder value: shareholder value depends upon complementary institutional arrangements in national business systems, which are far from universal. The book concludes with a critical analysis of the justifications for shareholder value and investor engagement, highlighting the weaknesses of both efficiency and equity justifications.

Readership: Academics, researchers, and advanced students of Economics, Finance, Business, and Corporate Governance; Finance Sector professionals; Economic policymakers.

1: Shareholder Value as Context for Investor Engagement
2: Investor Engagement
3: Institutional Investor Engagement Propensity
4: Forms of Institutional Investor Engagement
5: Private Equity Investor Engagement
6: Managing Investors
7: Corporate Governance Convergence in International Perspective
8: Shareholder Value, Investor Engagement, and Management Practice: A Normative Evaluation

Roderick Martin, Professor, Central European University Business School, Budapest, Peter D. Casson, Senior Lecturer in Accounting, School of Management, University of Southampton, and Tahir M. Nisar, Lecturer, School of Management, University of Southampton