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Who runs companies? Managers or investors?

Published: 22 April 2004

Relations between investors, Boards of Directors and senior managers are in the news again with the recent resignation of top executives at Shell. A new research project at the University's School of Management is examining these relationships and their effect on companies. Professor Roderick Martin and colleagues aim to discover what are and what should be the links between shareholders and the firms in which their investments are held.

After an extensive survey of existing literature, the project will analyse relationships between different types of investor (pension funds, venture capital firms and private shareholders) and different aspects of company performance such as expenditure on research and development. Research will involve case studies in the UK, Germany and the US to examine their varying patterns of investor management relations. The project will also look at issues such as shareholder activism, the role of the Board and the ways managers seek to control relations with investors.

Professor Martin said: "Some people argue shareholders in the US and the UK exercise too much influence on the companies they invest in, resulting in short termism, and others elsewhere have too little influence, failing to discipline poor management performance."

The Department of Trade and Industry is funding the £137,000 project by Professor Martin, Dr Tahir Nisar and Dr Peter Casson which will end in September 2004.

Notes for editors

  1. The University of Southampton's School of Management has an international reputation for academic and teaching excellence, offering a wide range of undergraduate and postgraduate degrees in Accounting, Banking, Corporate Risk, Finance, Information Systems, Management, Management Sciences and Risk Management. In October 2000 the national Quality Assurance Agency graded the School as 'excellent' in the assessment of its teaching quality for Higher Education. The School achieved a score of 23 out of a possible 24. Its PhD programme was awarded mode 'A' recognition by the Economic and Social Research Council (ESRC). The School now has over 700 students representing over 50 countries enrolled on its programmes, and over 40 full-time staff to teach them.
  2. The University of Southampton is a leading UK teaching and research institution with a global reputation for leading-edge research and scholarship. The University has over 19,200 students and 4,800 staff and plays an important role in the City of Southampton. Its annual turnover is in the region of £250 million.

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