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A conceptual mapping of the logics of institutional investors' corporate governance responsibilities: The case for "custodian" investor stewardship

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  • Rachelle Belinga

    (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Blanche Segrestin

    (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

Abstract

Institutional investor activism has received increasing attention for corporate governance scholars and policymakers. The promise of institutional monitoring of corporations has fueled social expectations over institutional investors. In the aftermath of the financial crisis, recent corporate governance rules have attempted to frame and rule institutional investors' corporate governance behavior. We draw upon these rules and legal research to unpack the rationales of these specific expectations. Employing an institutional logics perspective, we map the different logics of responsibility which drive institutional investors' corporate governance behaviors. This help us critically examine the notion of investor stewardship and propose a unified framework for institutional investors' corporate governance responsibilities. First, we argue that the coexistence of contrasted logics creates new sources of conflicts of interests for institutional investors. Second, we remark that corporate governance rules for institutional investors do not meet social welfare concerns. We then propose a custodian logic of responsibility for institutional investors which combines monitoring concerns and a concern for responsible management.

Suggested Citation

  • Rachelle Belinga & Blanche Segrestin, 2019. "A conceptual mapping of the logics of institutional investors' corporate governance responsibilities: The case for "custodian" investor stewardship," Post-Print hal-02167819, HAL.
  • Handle: RePEc:hal:journl:hal-02167819
    Note: View the original document on HAL open archive server: https://minesparis-psl.hal.science/hal-02167819
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