US institutional investors look at corporate governance in the 1990s

In the US and elsewhere, shareholdings in corporations have become more concentrated in the hands of institutional investors. Paradoxically, the latter have not increased their power over management. But in the US a lively debate has begun on the topic of corporate governance. Michael Useem, Edward Bowman, Jennifer Myatt, and Craig Irvine present the results of an extensive survey of US institutions in three main areas: investor relations with management, shortcomings of the present governance system, and anticipated trends in shareholder activism. In general, institutional investors are expected to redouble their efforts to make company directors more independent of managers and more accountable to owners.