How is corporate governance influenced by 'behind the scene' investors?

Corporate Law

The Board of Directors, working away from the public’s eye, towards achieving the vision of the company play an important role in the Corporate Governance. The institutional investors who are more inclined towards increasing the profitability of the company instead of liquidity in the form of dividend, usually has 2 types of choices according to acamidicians, such as voice theory and exit theory. The voice theory is considered to be the most effective out of all of them as the board of directors directly voice their opinion regarding the matters in question and solutions are derived faster. Second theory is called exit theory, it is indistinguishable as the threat can’t be segregated from real of fake. Threat to take back the investment or resign from the company keeps the others working alongside them behind the scenes on their toes and can help them get their desired results as it is impossible to know if they actually plan to leave or just making a false threat. The COVID situation left no stone unturned. It affected all aspects of the market, the companies, stock market, investors, banks, inflation, resources, etc. This paper talks about the Pre-covid period from the perspective of the investors onlooking the stock market and the Post-covid period recovering from the damage caused by the world wide pandemic.

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