Published Online:January 2026
Product Name:The IUP Journal of Corporate Governance
Product Type:Article
Product Code:IJCG040126
DOI:10.71329/IUPJCG/2026.25.1.68-89
Author Name:S Subramanian
Availability:YES
Subject/Domain:Management
Download Format:PDF
Pages:68-89
This paper examines how mutual fund houses sponsored by business groups navigate conflicts of interest when voting on resolutions in shareholder meetings. This exploratory study empirically examines the voting behavior of mutual fund houses affiliated with business groups in their investee companies over a six-year period, from 2014 to 2020. It specifically focuses on the voting patterns of fund houses on the shareholder resolutions of affiliated sister companies and competitor firms. The findings of regression analysis suggest that fund houses sponsored by business groups exhibit bias in their voting behavior. Despite receiving ‘vote against’ recommendations from proxy advisory firms, they consistently supported the resolutions in the sister firms by not voting against them. It is interesting to note that mutual funds tend to vote in favor of resolutions put forth by competitor firms. This discovery carries significant implications for the regulation of mutual funds.
‘Institutional investor activism’ is one of the important corporate governance mechanisms in the 21st century (Black, 1998). However, it was not the case earlier. Institutional investors assumed a passive stance towards the governance processes of investee firms worldwide until the early 1980s