Corporate Governance and Shareholder Activism: An Institutional Approach

Abstract

The existing research seeks to investigate the effectiveness of institutional investors as internal corporate governance mechanism and measures the distinctiveness of institutional investors as stockholders instead of number of shareholdings via inductive process. Given the interpretivist philosophical paradigm, the current research used qualitative research design along-with thematic analysis of interviews. The findings reveal institutional investor‟s activism through ownership engagement at moderate level. Moreover, it has been observed that ownership engagement is the influential mean to affect the governance issues of investee. However, the strict action which compels the management to work for the best interests of stockholders was not identified. With reference to these findings, the researches implies that institutional investors are capable to use their institutional powers, however, they are not willing to take active role to involve the investee corporations in the context of Pakistan. The study can improve the consideration of stakeholders specifically government, policy makers, Securities and Exchange Commission of Pakistan and investee companies in Pakistan.