HIGHLIGHT: There is an agency problem in the U. S. between passive investors and [corporate] managers. The most prominent strategy [to discipline management] is to encourage institutional investors to be more active in corporate governance (Romano [1995]). 

Institutional fund managers may nonetheless seek some way to intervene in the companies they own (see "Dangerous Investing" [1994]). There are two main avenues for intervention: corporate governance and social action. This article deals primarily with issues of corporate governance. Institutions will want to improve corporate governance in order to achieve an increase in share value. The degree of activism exerted by various institutions in intervening in investee corporate governance varies widely by type of institutions, but one general observation seems appropriate to describe the corporate response expected in information gathering requests: corporations should be cooperative and prepare meaningful replies when asked for information by shareholders (especially large ones), and share holder feedback should be welcomed (see Felton, Hudnut, and Witt [1995]). Much of the information sought is likely to be available within the corporation and retrievable by the shareholder relations group. 

THE DEMOGRAPHICS OF INSTITUTIONAL HOLDERS

THE NATURE OF CORPORATE GOVERNANCE

SOCIAL ACTION

INSTITUTIONAL ACTIVITIES

A SNAPSHOT OF INSTITUTIONAL PROPOSALS

IMPROVEMENT INITIATIVES

MAKING A START

SUMMARY

BIBLIOGRAPHY