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Define Institutional Investors. Do Institutional Investors Exercise Too Much Power In Relation To Corporate Governance?

4052 words - 16 pages

1. Define the institutional investor:1.1 The Meaning of Institutional Investors:Institutional investors are diverse set of organizations, including banks, public and private pension funds, mutual funds and insurance companies, among others. The relationship between the company and the institutional investor can be described as investor relationship and business relationship.1.2 Some of the companies that comprise the institutions, which invest:l- American International Assurance Company (Australia) Ltd:American International Assurance Company (Australia) Ltd comprises the institution that is American International Group Inc (AIG). American International Group, Inc. AIG takes a lead in international insurance and financial services, with operations in more than 130 countries. Its global businesses include insurance services, retirement services, financial services and asset management. For example, it occupies one of the largest U.S. retirement services through AIG SunAmerica and AIG VALIC. The ten major investors include: Citicorp and Citibank, N.A, The Molson Companies Limited, Prudential Insurance Company of America, Credit Suisse First Boston, American International Group, Inc, WQED Multimedia, Hellman & Friedman LLC, Sullivan & Cromwell, Former United States Secretary of Defense and Senator, and National Bureau of Economic Research.-HSBC Asset Management (Australia) Limited:HSBC Asset Management (Australia) Limited is acquired the Challenger Financial Services Group. Challenger Financial Services Group Limited is an Australian institution; it is comprised of three core businesses, Challenger Life, Challenger Wholesale Finance and Challenger Wealth Management. The major ten investors are: Investment Banking Group, Centaurus Corporate Finance Pty Limited, Commonwealth Bank, Colonial group, Coopers & Lybrand, National Mutual Funds Management (International) Limited, Incitec Limited, Deloitte Touche Tohmatsu, Publishing and Broadcasting Ltd (PBL), and JG Service Pty Limited.1.3 Percentages of Australian listed companies are owned by institutional investors:Recently, there are nearly half of the stock of large listed public Australian companies is held by institutional investors.2. Define corporate governance:2.1 What is corporate governance?The term corporate governance is a system that consists of formal or informal institutions, laws and rules that apply to specific financial markets and organizational forms, in order to determine the distribution of power, that is, how ownership is assigned, managerial decisions are made, and information is audited and released, and to determine the distribution of remuneration and profit. In broader term, corporate governance covers "the relationships between the boards and shareholders, top management, regulators and auditors, and other stakeholders".2.2 Why good corporate governance important?As refer to the OECD Principles of Corporate Governance (1999), they are intended to reflect common...

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