Financial Institutions and Corporate Governance : A Dynamic Model of Corporate Governance

This report describes a detailed model of the private corporate governance role of financial institutions and how this role is related to public corporate governance processes.

The report begins by illustrating the private, implicit corporate governance process of financial institutions during good corporate performance.

The second half of the report outlines a dynamic, five staged model of fund managers (FM) corporate governance influence.

This report arises from a research project funded by the CIMA Research Foundation.

It is based on case interviews with 40 large UK FM groups during 1997-2000.

It predicts that fund managers will use their private influence only as a result of environmental, social and ethical issues adverse impact on corporate share prices.