Institutional Investor Governance: Evidence from Stewardship Code Disclosures

2023 Fiscal Year Final Research Report

• Project/Area Number: 21K01780
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Review Section: Basic Section 07100:Accounting-related
• Research Institution: Hitotsubashi University
• Principal Investigator: ROUTLEDGE James 一橋大学, 大学院経営管理研究科, 教授 (50771268)
• Project Period (FY): 2021-04-01 – 2024-03-31
• Keywords: Stewardship / Institutional Investors / Governance

Outline of Final Research Achievements

The research has achieved the two project aims. First, Code disclosures by institutional investors have been analyzed to measure the extent of their Code compliance and stewardship activity and to develop a disclosure and stewardship activity score. This has provided valuable evidence regarding the level and type of stewardship activities of Code compliant institutional investors. Second, the study has achieved its aim of assessing if the Code has improved institutional investor stewardship or governance. Analysis conducted has examined the association between Code compliant shareholding and investee governance quality. This shows that Code adoption strengthens investors’ preference for high-quality investee governance. Other findings show that investor stewardship activity is a factor that influences strategic R&D investment. Overall, the research supplies important data about the usefulness of stewardship regulation that has been adopted in several countries.

Free Research Field

Accounting

Academic Significance and Societal Importance of the Research Achievements

Despite the introduction of stewardship regulation worldwide, there is little research that examines its operation. The study shows that compliance with stewardship regulation positively influences institutional investor decision-making and that stewardship disclosures provide valuable information.