Date of this Version


Document Type

Journal Article




This article considers the functions of the shareholders, particularly institutional investors, in corporate governance. Part 1 examines the current division of decision-making powers in the Anglo-American legal systems and its consequences; Part 2 discusses whether shifting power towards shareholders would really constitute an advantage for the firm as a whole; Part 3 looks more specifically at institutional investors, their capacity to take a leading role in running the company and the reasons for their apathy; and Part 4 seeks to address some of the regulatory reforms that should be considered in the UK and the United States of America, although it is argued that regulation is often prompted by the urge to respond to a crisis rather than by the actual need to re-think entirely the present allocation of powers.