Institutional Investor Stewardship in the UK and Malaysia: Functionally Similar, Contextually Challenged

2019 ◽  
Vol 14 (2) ◽  
pp. 279-304
Author(s):  
Petrina Tjin Yi TAN
Keyword(s):  
Institutional Investors ◽  
Institutional Investor ◽  
Legal Framework ◽  
Theory And Practice ◽  
Shareholder Rights ◽  
Structural Factors ◽  
Agency Conflicts ◽  
Investment Companies ◽  
The Uk ◽  
The Impact

AbstractInstitutional investors are acknowledged as an influential force in markets worldwide. As a result of increased focus on the impact from the investing and shareholding practices of institutional investors, stewardship codes were first introduced in the UK, followed by Malaysia. This article evaluates the theory and practice of institutional investor stewardship in Malaysia through functional and contextual lenses, as juxtaposed against the more established position of stewardship in the UK. Notwithstanding an analogous legal framework for shareholder rights and the textual similarities of the UK Stewardship Code and Malaysian Code for Institutional Investors, the dominance of government-linked investment companies and government-linked companies in Malaysia results in a distinct set of issues in relation to institutional investor stewardship. This article then argues that the stewardship codes are in themselves insufficient in increasing the quality and scope of institutional investor engagement as they fail to address the underlying agency conflicts between the institutional investors and ultimate beneficiaries or clients. In learning from the UK's experience, it is important that Malaysian policymakers pay attention to the overarching structural factors and incentives driving institutional investor engagement alongside the development and take-up of the stewardship code.

The Effect of Institutional Investors’ Voice on the Terms and Outcome of Freeze-out Tender Offers

2020 ◽  
Vol 10 (01) ◽  
pp. 2050002
Author(s):  
Beni Lauterbach ◽  
Yevgeny Mugerman
Keyword(s):  
Institutional Investors ◽  
Institutional Investor ◽  
The Other ◽  
Tender Offers ◽  
Controlling Shareholders ◽  
Going Private ◽  
Other Hand ◽  
The Impact ◽  
Freeze Out ◽  
Regulatory Intervention

We study the impact of institutional investors’ “voice” on 201 going private tender offers by controlling shareholders (“freeze-out” offers) in Israel. Israeli regulatory intervention in freeze-out tender offers is relatively mild; thus, institutional investors’ activism becomes crucial. We find that institutional voice has dual effects. On one hand, when there are pre-negotiations with institutional investors’ (their voice is heard), accepted offers’ premiums increase. On the other hand, when institutional investors express their voice, yet reject the offer, these rejections appear to hurt shareholders’ value. We also document significant institutional investor exit after rejected offers, especially after offers preceded by voice (pre-negotiations with institutional investors).

Part IV Regulatory and Other Developments in the UK 2010‒2016, 16 General Legal and Conduct Risk Implications of the Crises and Regulator-Led Redress

2018 ◽  
Author(s):  
Mccormick Roger ◽  
Stears Chris
Keyword(s):  
Financial Crisis ◽  
Common Law ◽  
Legal Framework ◽  
Risk Profile ◽  
Legal Risk ◽  
Regulatory Factors ◽  
Criminal Charges ◽  
The Uk ◽  
The Impact

In the post-financial crisis era, conduct regulation has permeated every facet of an institution’s operations. Not only does the legal framework for the delivery of redress impact the legal risk profile of an activity, but the very ‘approach’ of the regulator exacerbates the legal risk inherent in that activity. This issue is of specific relevance in the context of mis-selling cases, as the regulator may direct (or otherwise sponsor or influence) the terms of redress and in ways that may not be perfectly aligned to a strict application of liability under English common law. This chapter first explores post-financial crisis litigation and criminal charges and the influence of government and regulators on the provision of redress. It then analyzes a legal brake on liability — specifically, the impact of contractual estoppel in mis-selling cases. It concludes with a review of the regulatory factors relevant to redress and the leveraging of post-crises sentiment to promote extra-regulatory schemes.

Populist politics and democracy in the UK: implications for community development

2020 ◽  
pp. 165-186
Author(s):  
Keith Popple
Keyword(s):  
Community Development ◽  
Electoral System ◽  
Theory And Practice ◽  
The Political ◽  
Right Wing ◽  
The United Kingdom ◽  
The Uk ◽  
Political Right ◽  
The Impact ◽  
Finance Capitalism

This chapter outlines how British populist politics, and in particular right-wing populist politics, has had significant implications for communities, for the theory and practice of community development, and for those presently involved in the activity in the United Kingdom, where it has suffered substantial financial cutbacks. The outcome of the austerity measures that has led to the contemporary presence of populism in the UK has been a mounting dissatisfaction and a general lack of trust in politics amongst millions in the country. This, together with a hangover from the 'parliamentary expenses scandal' that involved members from both Houses of Parliament, has created a marked degree of scepticism about the workings of the British electoral system. Further, there has been a growing lack of confidence in the system of neoliberal globalised finance capitalism that has left countless communities poorer and economically less secure. People's anger and frustration with these actions have been harnessed by the political right, which during the 2016 Referendum debate focused on the impact of immigration on communities. The chapter then notes the unique elements of community development and reflects on the role it can play in these challenging times. It argues that community development now requires greater funding and recognition while reconceptualising itself in a more radical manner.

Changes in ownership forms and role of institutional investors in governing public companies in Malaysia

2015 ◽  
Vol 11 (4) ◽  
pp. 455-475 ◽  
Author(s):  
Hairul Azlan Annuar
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Institutional Investor ◽  
Governance System ◽  
Public Companies ◽  
Content Type ◽  
Investment Companies ◽  
Corporate Governance System ◽  
Different Types

Purpose – The purpose of this paper is to ascertain whether different types of institutional investor in Malaysia are involved in the corporate governance of their investee companies, and, if yes, to what extent is the level of the involvement. Design/methodology/approach – A qualitative approach, consisting of a series of interviews with 18 senior investment managers of different types of institutional investor, was chosen. Findings – The findings suggest that lessons learnt from the fallout of the Asian crisis has made Malaysian institutional investors not only to be more prudent in managing their total funds and in making equities investment decisions, but has resulted in a more active participation in their “core” investee companies apart from merely discharging their voting rights. Interview analysis revealed that government-linked investment companies are championing the cause and could possibly affect the overall level of institutional investors’ involvement, which bode well for the future of the corporate governance system of the country. Research limitations/implications – Generalisations may be an issue when interviews are used as the method of inquiry. Also, the sample is not random, as access to many managers depended on recommendations. In addition, respondents were consciously selected to obtain different types of institutional investors that included government and non-government linked. Originality/value – There is a lack of work on studying the involvement of institutional investors in developing countries, whereby previous work and literature review were predominantly based upon the experience of Western economies.

Qualitative Changes in Marketing Due to the Impact of E-Commerce

2020 ◽  
Vol 12 (3-2) ◽  
pp. 363-375
Author(s):  
Dmitriy Ukraincev ◽  
Keyword(s):  
Internet Marketing ◽  
Scientific Discipline ◽  
Theory And Practice ◽  
The Internet ◽  
Strong Impact ◽  
Marketing Orientation ◽  
Independent Direction ◽  
The Uk ◽  
The Impact

The development and widespread adoption of digital economy in the last two decades inevitably had strong impact on the theory and practice of marketing. Under the influence of e-Commerce the form and content of marketing has changed. Today we can talk about the formation of a new field of study – Internet marketing. However, even in the European literature, the description of Internet marketing is fragmentary, Russian authors often do not consider Internet marketing as an independent direction in marketing. This article describes the role of e-Commerce in the economy. The author considers the role of e-Commerce in the world economy and in the economy of individual countries. About 10% of world trade is already carried out via the Internet, in some countries (China, Japan, the UK) the share of e-Commerce in GDP is more than 20%. The growth rate of e-Commerce is also impressive – 30% per year. The Russian e-Commerce market and the Chinese e-Commerce market are analyzed separately. The author highlights the fact that e-Commerce has made a great contribution to the development of China’s economy. Internet marketing in the article is considered as an integral part of e-Commerce, fully responsible for all the interaction of the company and the external environment through the Internet. Basing on the research of some writers, the author concludes that Internet marketing is advisable to study as an independent scientific discipline. The article identifies and investigates the main changes that have occurred in marketing under the influence of e-Commerce: 1) change of marketing orientation from goods to customers; 2) multi-channel approach to promotion; 3) mobility; 4) adaptability and interactivity of marketing; 5) significant increase in audience coverage.

A comparative study on disqualification of company directors in the UK and Nigeria

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Samet Caliskan ◽  
Pereowei Subai
Keyword(s):  
Public Awareness ◽  
Legal Framework ◽  
Company Law ◽  
Primary Case ◽  
Advanced Economy ◽  
Content Type ◽  
The Law ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to argue that the disqualification of directors, coupled with other liabilities to which they may be subjected, particularly in insolvency, should be sufficient to deter wrongdoing, because of the impact they tend to have on their personal and professional lives. It, however, argues that the “deterrence” effect would be dependent on the existence of other factors such as the efficient application of the law, publicity and post-disqualification monitoring. Design/methodology/approach Using the UK as its primary case study, while also making reference to Nigeria and Turkey, this paper will show that while the existence of disqualification as a sanction exists in the first two countries, it is virtually absent from Turkey. And that while directors’ disqualification provisions are routinely applied in the UK, they are hardly invoked in Nigeria, except perhaps with respect to listed companies, due perhaps to a lack of awareness of its existence or potency. Findings This paper will conclude by making a case for a stronger application of the law, as it relates to directors’ disqualification in the UK, call for an elaboration of the legal framework in Nigeria as well as the need for a public awareness of its provisions and potential impact and contend that Turkey should put in place a legal framework for directors’ disqualification patterned also after the UK framework. Originality/value The uniqueness of this paper stems from its tri-country focus. In that respect, the UK, which is a more advanced economy, with a robust and dynamic company law regime, is used as the primary case study, whereas at the same time, developments in Nigeria, particularly with that country’s capital market, will be extracted and compared with the UK framework. Turkey, on the contrary, has been chosen as a case study mainly because it has no directors’ disqualification mechanism in its legal system. Comparing directors’ disqualification in one developing country, Nigeria, and a developed country, the UK and determining their upsides and downsides will be beneficial to Turkey in respect to establishing a deterrent effective disqualification mechanism on directors.

Investor sentiments and pricing errors

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rahul Verma ◽  
Priti Verma
Keyword(s):  
Risk Factors ◽  
Institutional Investors ◽  
Stock Prices ◽  
Institutional Investor ◽  
Content Type ◽  
Valuation Model ◽  
Intrinsic Values ◽  
Pricing Errors ◽  
Investor Sentiments ◽  
The Impact

PurposeThis paper computes the pricing errors of S&P 500 index by employing the valuation model developed by Doran et al. (2009) and investigates its response to individual and institutional investor sentiments. This study contributes to the literature by looking at both rational and quasi-rational sentiments and how noise trading and investments based on fundamentals affect pricing errors.Design/methodology/approachThis paper computes the pricing errors of S&P 500 index by employing the valuation model developed by Doran et al. (2009) and investigates its response to individual and institutional investor sentiments.FindingsResults show that pricing errors are persistent and stock prices systematically deviate from their intrinsic values. The authors also find that both individuals and institutional investors form their expectations based on risk factors as well as noise; however, institutional investors seems to be more driven by rational factors. The findings also suggest that institutional investors have a significant power to cause pricing errors due to unpredictable changes in their sentiments while small investors lack such ability to move stock prices away from their intrinsic values. Additionally, this paper finds that quasi-rational (rational) investor sentiments have positive (negative) impact on pricing errors suggesting that trading based on noise is an important determinant of pricing errors while investors' expectations stemming from fundamentals play an important role in improving market efficiency.Research limitations/implicationsThe impact of rational outlook due to changes in fundamentals seems to be greater than that of noise on the pricing errors, consistent with both risk-based and behavioral models of the asset pricing literature.Originality/valueOur study contributes to the existing literature in the following ways: first, the authors employ most recent data to compute mispricing for the market index and investigate if it is persistent and systematic. Second, the authors decompose sentiment variables into rational and quasi-rational components and trace their dynamics to better understand the role of risk factors and noise in the formation of sentiments. Third, the authors investigate the relative impact of individual and institutional investor sentiments on mispricing. Lastly, the authors examine the response of pricing errors to both rational and quasi-rational sentiments of individual and institutional investors.

scholarly journals Diffuse pesticide pollution of drinking water sources: impact of legislation and UK responses

Water Policy ◽  
2012 ◽  
Vol 14 (4) ◽  
pp. 680-693 ◽  
Author(s):  
T. Dolan ◽  
P. Howsam ◽  
D. J. Parsons
Keyword(s):  
Water Quality ◽  
Drinking Water ◽  
Environmental Water ◽  
Legal Framework ◽  
Pesticide Use ◽  
Agricultural Practice ◽  
Pesticide Pollution ◽  
Water Companies ◽  
The Uk ◽  
The Impact

Diffuse pesticide pollution is a problem for the environment, but it also presents a challenge for water companies managing treatment infrastructure to produce potable water. The legal framework for this context has three main components: that dealing with pesticides and pesticide use, that dealing with environmental water quality and that dealing with drinking water quality. The study set out to identify, interpret and assess the impact of the legal framework related to this challenge. The study found that the current policy and legislation do not provide a coordinated legal framework and some changes are warranted. For example the Water Framework Directive (WFD) sets environmental quality standards for some, but not all, pesticides. Article 7 provides special protection of water bodies used as sources for drinking water supply, but it is not clear whether the UK will achieve full compliance by 2015. This is a problem for water companies planning investment, because the WFD and Drinking Water Directive remain legally distinct. Further uncertainty arises from the application of Regulation (EC) 1107/2009 and the extent that restricted availability of pesticides will drive changes in agricultural practice and pesticide use.

scholarly journals Contrasting Patterns of Industrial Relations in Britain

1970 ◽  
Vol 17 (2) ◽  
Author(s):  
Mick Marchington
Keyword(s):  
Great Britain ◽  
Prime Minister ◽  
Industrial Relations ◽  
Legal Framework ◽  
Considerable Change ◽  
National Institutions ◽  
The Uk ◽  
The Impact

Given that Mrs Thatcher is no longer Prime Minister, now seems an appropiate time to try and provide an assessment of where industrial relations currently stands in Britain, and what has been the impact of Thatcherism on the system. This exercis,e has a certain intellectual as well as practical appeal given the grand claims which have been made about rhe extent of change in the UK since 1979. It is true to say that there ,has be,en considerable change to the national institutions and the legal framework for industrial relations in Great Britain. But, at the same time, there are also tloub,ts as to whether this has been reflected in concrete industrial relations practices at the workplace. Interesting as this debate is however, it is argued here that it ,is misleading because a whole series of assumptions are made about the character of British industrial relations, both in 1979 and in 1991, which are not applicable across the economy as a whole. A much more useful approach is to focus on the variety which exists in British industrial relations, and to outline in a series of patterns of industrial relations rather than trying to describe a universal all embracing picture.

“Is the person who he claims to be?” old fashion due diligence may give the correct answer!

2016 ◽  
Vol 19 (1) ◽  
pp. 79-91 ◽  
Author(s):  
George Demetriades
Keyword(s):  
Legal Framework ◽  
Economic Crime ◽  
Due Diligence ◽  
Current Application ◽  
Content Type ◽  
High Profile ◽  
Evolution Of Technology ◽  
The Uk ◽  
Customer Due Diligence ◽  
The Impact

Purpose – This paper aims to critically examine the impact of the evolution of technology regarding customer due diligence (CDD) measures and highlight potential weaknesses in the areas of business emerged from third parties, politically exposed persons and international clients. The paper explores whether the use of old-fashioned CDD measures can aid relevant professionals to examine whether the (potential) client is who he claims to be. Design/methodology/approach – The paper is focused primarily on the use of important evaluation reports, in Cyprus and the UK, to identify potential flaws regarding CDD measures and the legal framework in fighting economic crime. Interviews from professionals were carried out to provide first-hand experience on relevant issues. Findings – The view, that nowadays due to the evolution of technology, CDD is more efficient than ever, is based on solid ground. However, taking in consideration relevant reviews and reports, the paper concludes that there are significant problems and difficulties in gathering and assessing client’s information. Therefore, the use of old-fashioned due diligence measures, in appropriate circumstances, might provide a more adequate investigation for high-risk customers. Practical implications – The paper, in contrast with a professional’s recorded opinions, uses high profile reports to prove that there is a loophole in current legal framework relating to CDD measures. Originality/value – The paper uses two important reports from Cyprus and the UK to prove the weaknesses of current application of CDD measures. The analysis provided in the paper can be used to persuade professionals that there is space for the use of old-fashioned CDD.

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