ABSTRACT
Based on empirical evidence, we accept as fact the changing ownership pattern of corporations between individual and institutional investors in favor of institutions, and ask these key questions: (1) How does such a shift enhance corporate governance in general and particularly via board effectiveness? (2) Is such institutional investor oriented board effectiveness equally achievable in emerging economies that are characterized largely by relatively less than efficient institutional infrastructures and/or dominance of culture-based/informal resolution arrangements? (3) Are there ways to strengthen the corporate governance usefulness of institutional investment in the emerging market context? The chapter unfolds along the lines of attempts to answer these key questions. More specifically, by carefully delineating the reasons for the agency context of emerging economies, we are able to proffer creative solutions that are underpinned by efforts at counter-balancing the effects of concentration on boards of firms and attempts at bridging the trust gap between controlling owner-managers and minority interests.
