The growing dominance of equity holdings by institutional investors, both domestic and
international, is casting a sharp focus on their activities and owners and monitors of firms. It is
suggested that whereas some general considerations arise in all cases, it is useful to separate discussion
of the developments in the Anglo Saxon countries and continental Europe/Japan. The former is
showing an increase in direct influence of institutions in place of the previous reliance on the takeover
mechanism to discipline managers. This has arguably led to improved corporate performance. The
latter remain more firmly in the bank-relationship based governance paradigm. On the other hand, such
differences should not be exaggerated, and some convergence is discernible on a modified form of the
Anglo Saxon paradigm where institutions are the primary actors in corporate governance generally. In
Europe, EMU will provide a major spur to such convergence
