The developing role and responsibilities of institutional shareholders - Governors speech

Quarterly Bulletin 1984 Q2
Published on 01 June 1984

The Governor discusses ' ... how institutional investors can make a larger contribution to improving the economic performance on which the well-being of their own shareholders and beneficiaries ultimately and directly depends'.

He starts by describing the market environment in which institutions invest and notes the growing concentration of investment and equity holding into the hands of the institutions. This concentration of ownership brings obligations: ' ... shareholders cannot themselves avoid responsibility for the difficulties of companies to whose boards they have been insufficiently attentive'.

As economic recovery is consolidated ' ... companies and investors will need to pay much greater attention to the non-price aspects of competitiveness, such as innovation, design and development and marketing'. This requires ' ... a readiness on the part of institutional investors and others deliberately to hypothecate part of their budgets for investment in new higher value-added areas of activity'.

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