Question

Should large institutional investors have more control over the affairs of a corporation than the individual investors?

Answer 1

The short answer is that it depends. You will organizations thrive and fail in both scenarios. However, it is often likely that large institutional investors have more control over a corporation than small investors. Large institutional investors hold a lot of shares and having voting powers and hence can influence a lot of decisions. Institutional investors often don't sell their shares in a company in a short term as they research in depth before taking a position. Institutional investors have the capability to both increase and destroy value for small investors. In absence of such large investos, the managers of the corporation may not work towards the benefit of small shareholders. Small investors cannot have much influence. So large investors to that extent should have larger control as it aligns the goals of small shareholders too with the vision of corporation. Overall if the company does well, not only do largw investors but also small ones benefit. But because large investors have technical manpower, market knowledge and voting powers they are at a much better position to have control and influence.