Chapter

Strong Managers and Passive Institutional Investors in the UK

Marc Goergen and Luc Renneboog

in The Control of Corporate Europe

Published in print October 2002 | ISBN: 9780199257539
Published online November 2003 | e-ISBN: 9780191595905 | DOI: http://dx.doi.org/10.1093/0199257531.003.0010
 Strong Managers and Passive Institutional Investors in the UK

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In contrast to most Continental European countries, the UK has had stringent rules on ownership disclosure for more than 50 years. However, despite this, we show that the corporate governance system in the UK still needs to be improved. The way ownership of listed companies is concentrated in the hands of corporate directors and of passive institutional investors creates its own type of agency problems, i.e., high managerial discretion. Furthermore, there is mounting evidence that hostile takeovers do not necessarily discipline badly performing managers.

Keywords: control; corporate governance; ownership; regulation; United Kingdom

Chapter.  10730 words.  Illustrated.

Subjects: Financial Markets

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