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Institutional Investment & Corporate Accountability

Aims & objectives

In this project we investigated some of the processes and relationships involved in this chain of accountability, focusing in particular on finance directors and fund managers. How are their responsibilities exercised, and to what effect, and how are they held accountable? To address such questions we examined the preparation, conduct and consequences of the regular face-to-face meetings between companies and their major institutional shareholders.

Initially, we held preparatory meetings with practitioners to clarify the issues, and completed a review of the literature. We also carried out a first set of substantive interviews, with FTSE 100 company finance and investor relations directors, asking how they approached such meetings, what they gained from them, and what actions they took as a result.

In the second phase of the project we sought the same information from chief investment officers, fund managers and buy-side analysts. We also attended, as observers, a series of company – fund manager meetings.

Results & dissemination

Our analysis of the data collected led us to conclude that the meetings, though often ritualistic, have concrete effects. For example, by routinely reminding company directors that their primary accountability is to their shareholders, fund managers ensure that directors remain focused on the pursuit of shareholder value. In this way, it may be argued, they promote the financialisation of the companies in which they invest.

The formal project work was completed by Spring 2004.

Journal articles

Hendry, J; Sanderson, P; Barker, R. G., and Roberts, J. (2007) Responsible ownership, shareholder value and the new shareholder activism. Competition and Change (in press).

Hendry, J; Sanderson, P; Barker, R. G., and Roberts, J. (2006) Owners or traders? Conceptualizations of institutional investors and their relationship with corporate managers. Human Relations 59 (8): 1101-1132.

Roberts, J., Sanderson, P., Barker, R. G., and Hendry, J. (2006) ‘In the Mirror of the Market: The Disciplinary Effects of Company / Fund Manager Meetings.’ Accounting, Organisations and Society 31 (3): 277-294.

Sanderson, P., Hendry, J., Roberts, J., and Barker, R. G. (2005) Regulating the Corporation: The Role of the Institutional Investor. Journal of Corporate Ownership & Control. 3 (1): 127-134.

Working papers

Hendry, J., Sanderson, P., Barker, R. G. and Roberts, J. (2004) ‘Responsible ownership, shareholder value, and the new shareholder activism.’ Centre for Business Research Working Paper No. 297.

Hendry, J., Sanderson, P., Barker, R. G. and Roberts, J. (2004) ‘Owners, Traders and Providers of Capital; the multiple faces of institutional investors.’ Centre for Business Research Working Paper No. 296.

Barker, R. G., Sanderson, P., Hendry, J.and Roberts, J. (2004) ‘The corporate – fund manager interface; objectives, information and valuation.’ Centre for Business Research Working Paper No. 293.

Roberts, J., Sanderson, P., Hendry, J. and Barker, R. G. (2004) ‘In the mirror of the market; the disciplinary effects of company – fund manager relationships.’ Centre for Business Research Working Paper No. 290.

Conference/Workshop papers

Sanderson, P. (2006) ‘Regulators’ Perceptions of their Responsibilities to the Public and Other Stakeholders: Evidence and Observations from the UK.’ The Organizing Society, 22nd European Group for Organizational Studies Colloquium, University of Bergen, Norway.

Sanderson, P. and Seidl, D. (2006) ‘Codes of Corporate Governance: Germany and Britain.’ Centre for Business Research Summit: Innovation and Governance. Robinson College, University of Cambridge. Mar.

Sanderson, P. (2005) ‘Institutional Investors: Unwilling Regulators.’ Systems of Corporate Governance. Girton College, University of Cambridge: June.

19 June 2004: The art of performance

Project leaders

John Roberts (Cambridge Judge Business School)
John Hendry (Brunel University)
Richard Barker (Cambridge Judge Business School)

Research fellow

Paul Sanderson

Project status


Project dates



ESRC (core grant to CBR)