The global rise of institutional shareholders has triggered debates concerning their roles in cor... more The global rise of institutional shareholders has triggered debates concerning their roles in corporate governance. Their lack of engagement with the investee companies had been largely criticised following the Global Financial Crisis in 2008. To fill the engagement gap UK and EU opted for empowering shareholders by introducing ‘comply or explain’ based legislations. However, with the increase of pressing issues such as climate change and social problems, sustainability and ESG have gained importance in corporate governance. Lawmakers want these issues to be an indispensable part of corporate governance with the help of institutional shareholders. UK Stewardship Code has been a pioneer to require institutional shareholders to promote sustainable business practices and to integrate ESG considerations into their investment and engagement decisions. This dissertation analyses to what extent UK Stewardship Code can be influential on institutional shareholders. As being one of the largest subjects of the UK Stewardship Code, a case study on the world biggest asset management company, BlackRock is conducted. This study argues that although the public stance of institutional shareholders, including BlackRock, have changed in parallel to the growing emphasis on sustainability in the legal framework, the results will not be very encouraging given the incentive problems continue to exist. It also draws attention to the potential unintended consequences of empowering institutional shareholders considering the concentrated market.
The global rise of institutional shareholders has triggered debates concerning their roles in cor... more The global rise of institutional shareholders has triggered debates concerning their roles in corporate governance. Their lack of engagement with the investee companies had been largely criticised following the Global Financial Crisis in 2008. To fill the engagement gap UK and EU opted for empowering shareholders by introducing ‘comply or explain’ based legislations. However, with the increase of pressing issues such as climate change and social problems, sustainability and ESG have gained importance in corporate governance. Lawmakers want these issues to be an indispensable part of corporate governance with the help of institutional shareholders. UK Stewardship Code has been a pioneer to require institutional shareholders to promote sustainable business practices and to integrate ESG considerations into their investment and engagement decisions. This dissertation analyses to what extent UK Stewardship Code can be influential on institutional shareholders. As being one of the largest subjects of the UK Stewardship Code, a case study on the world biggest asset management company, BlackRock is conducted. This study argues that although the public stance of institutional shareholders, including BlackRock, have changed in parallel to the growing emphasis on sustainability in the legal framework, the results will not be very encouraging given the incentive problems continue to exist. It also draws attention to the potential unintended consequences of empowering institutional shareholders considering the concentrated market.
Uploads
UK Stewardship Code has been a pioneer to require institutional shareholders to promote sustainable business practices and to integrate ESG considerations into their investment and engagement decisions. This dissertation analyses to what extent UK Stewardship Code can be influential on institutional shareholders. As being one of the largest subjects of the UK Stewardship Code, a case study on the world biggest asset management company, BlackRock is conducted. This study argues that although the public stance of institutional shareholders, including BlackRock, have changed in parallel to the growing emphasis on sustainability in the legal framework, the results will not be very encouraging given the incentive problems continue to exist. It also draws attention to the potential unintended consequences of empowering institutional shareholders considering the concentrated market.
UK Stewardship Code has been a pioneer to require institutional shareholders to promote sustainable business practices and to integrate ESG considerations into their investment and engagement decisions. This dissertation analyses to what extent UK Stewardship Code can be influential on institutional shareholders. As being one of the largest subjects of the UK Stewardship Code, a case study on the world biggest asset management company, BlackRock is conducted. This study argues that although the public stance of institutional shareholders, including BlackRock, have changed in parallel to the growing emphasis on sustainability in the legal framework, the results will not be very encouraging given the incentive problems continue to exist. It also draws attention to the potential unintended consequences of empowering institutional shareholders considering the concentrated market.