Corporate governance affects investment decisions from "summary" of Institutional Investment Management by Frank J. Fabozzi
Corporate governance plays a crucial role in influencing the investment decisions made by institutional investors. The way in which a company is governed can have a significant impact on its financial performance and overall value. Institutional investors are concerned with maximizing returns and minimizing risks, and they recognize that strong corporate governance practices can help achieve these objectives. Effective corporate governance structures can enhance transparency, accountability, and integrity within a company. This, in turn, can lead to increased investor confidence and improved access to capital. Institutional investors are more likely to invest in companies with robust governance practices as they believe these companies are better managed and less likely to engage in activities that could harm shareholder value. On the other hand, companies with weak or ineffective governance structures may be viewed as riskier investments. Poor governance practices can result in conflicts of interest,...
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