Council of Institutional Investors

Definition

The Council of Institutional Investors (CII) is a nonprofit organization that represents the interests of pension funds, endowments, foundations, and other institutional investors. It focuses on promoting effective corporate governance, improving shareholder rights, and advocating for policies that benefit institutional investors. The CII plays a crucial role in the broader movement of shareholder activism by providing a platform for institutional investors to collaborate on governance issues and influence corporate practices.

5 Must Know Facts For Your Next Test

1. The Council of Institutional Investors was founded in 1985 and has grown to include over 130 members, representing more than $4 trillion in assets under management.
2. CII provides resources and guidance to its members on best practices in corporate governance and shareholder engagement.
3. The organization actively lobbies for regulatory changes that protect the rights of shareholders and improve transparency in corporate operations.
4. CII engages in public policy advocacy to influence legislation that affects institutional investors and their ability to exercise shareholder rights.
5. The Council hosts conferences and workshops to facilitate discussions among institutional investors about emerging governance trends and shareholder activism strategies.

Review Questions

• How does the Council of Institutional Investors promote effective corporate governance among its members?
  • The Council of Institutional Investors promotes effective corporate governance by providing its members with resources, guidance, and best practice recommendations. By facilitating discussions around governance issues, CII encourages collaboration among institutional investors to address common challenges. Additionally, the organization actively engages in advocacy efforts to influence regulations that enhance transparency and accountability within corporations.
• In what ways does the Council of Institutional Investors influence shareholder activism through its activities?
  • The Council of Institutional Investors influences shareholder activism by serving as a collective voice for its members on key governance issues. Through lobbying efforts and public policy advocacy, CII works to shape regulations that empower shareholders and promote their rights. The Council also provides a platform for sharing strategies and insights among institutional investors, enabling them to effectively engage with companies on important matters such as executive compensation and environmental responsibility.
• Evaluate the impact of the Council of Institutional Investors on the relationship between institutional investors and corporate management in today's business environment.
  • The Council of Institutional Investors significantly impacts the relationship between institutional investors and corporate management by fostering greater accountability and transparency in corporate governance. As institutional investors become more organized through CII, they are better equipped to challenge management practices that may not align with shareholder interests. This shift creates a more collaborative environment where corporate leaders recognize the importance of engaging with their largest shareholders, ultimately leading to improved governance standards and practices across various industries.

Related terms

Shareholder Activism: A strategy where shareholders use their ownership stake in a company to effect change, typically advocating for better governance or social responsibility.

Corporate Governance: The system by which companies are directed and controlled, focusing on the relationships among the management, board of directors, shareholders, and stakeholders.

Proxy Voting: A process that allows shareholders to vote on corporate matters without being physically present at a shareholder meeting, often facilitated by institutional investors.