What are the expectations from institutional shareholders? What are the principles of good governance for the institutional investors?

Institutional shareholders/investors are financial institutions that accept funds from third parties for investment in their own name but on behalf of such third parties. They include pension funds, mutual funds and insurance companies. The institutional investors/ shareholders can effectively use their power to influence the standard of corporate governance. They are expected to- Take active interest in the composition of the Board of Directors Be vigilant Maintain regular and systematic contact at senior level for exchange of views on management, strategy, performance and the quality of management. Ensure that voting intentions are translated into practice. Evaluate the corporate governance performance of the company. The UK Stewardship Code provides following seven principles of good governance for the institutional investors- Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities. Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship which should be publicly disclosed. Institutional investors should monitor their investee companies. Institutional investors should establish clear guidelines on when and how they will escalate their stewardship activities. Institutional investors should be willing to act collectively with other investors where appropriate. Institutional investors should have a clear policy on voting and disclosure of voting activity. Institutional investors should report periodically on their stewardship and voting activities.