Shareholder Groups and Corporate Monitoring : The UK Evidence

In this paper we analyze the monitoring role of different types of shareholder groups in the UK. We relate the objectives, structure and overall share holding of each shareholder group to their incentives to monitor companies in which they hold large stakes. We find that shareholder groups are not homogeneous in their investment style. In addition, our results show that some group of shareholders monitor companies in which they hold large stakes while others actually reduce value. Our results are consistent with the hypothesis that some shareholders are pressure-resistant while others are pressure-sensitive