ABSTRACT
This chapter aims to examine the features and business models of institutional shareholders, and what kind of shareholder activism they exercise in practice. The call for regulatory reforms could be too narrow or too broad without understanding this interaction between institutional shareholders and hedge funds. The increase in institutional ownership and the corresponding ownership concentration in both jurisdictions remain different from other jurisdictions in which controlling shareholders are observed. Institutional shareholders have different characteristic features due to their different business models of institutional investors. It is impossible to examine all types of institutional shareholders. The increasing hedge fund activism has stimulated other institutional shareholders which are willing to take an active role in corporate governance, and has led to an overall increase in activism by mainstream shareholders. The proposed changes alert the board that there may be managerial inefficiencies in the eyes of shareholders.
