For Institutional Investors, the Alternative of “Exit or Voice,” or “Empowerment or Engagement” in the United States and the United Kingdom

Authors

• Akio Otsuka, University of Tsukuba

Abstract

The article examines the role of institutional investors in corporate governance systems in the United States and the United Kingdom, focusing on their potential to address agency gaps created by the separation of ownership and control. It argues that while institutional investors, particularly activist hedge funds, can play a crucial role in monitoring and engaging with portfolio companies, challenges such as passivity and regulatory frameworks often hinder their effectiveness. The analysis draws on law and economics to evaluate how institutional activism can contribute to long-term corporate success and stakeholder value, highlighting differences in approaches between the two jurisdictions.

Disciplines

Comparative and Foreign Law | International Law | Law

Recommended Citation

Akio Otsuka, For Institutional Investors, the Alternative of “Exit or Voice,” or “Empowerment or Engagement” in the United States and the United Kingdom, 2 Cardozo Int’l & Compar. L. Rev. 673 (2019).
Available at: https://larc.cardozo.yu.edu/ciclr/vol2/iss3/4