Boards That Lead

Appendix A

Trends in Director Monitoring and Leading

Directors as Monitors of Management

In 1950, a small fraction of the shares of publicly traded companies were in the hands of professional investors, but during the decades that followed, institutional investors gradually acquired a far greater portion, and in doing so also attained a substantial degree of influence on these companies. The percentage of US corporate equity held by institutional investors rose tenfold from 6.1 in 1950 to 61.2 in 2005.¹

The growing concentration of shares in the hands of professional money managers is even greater among large firms. Drawing on the thousand largest enterprises by market capitalization as of May 1 each year, institutional investors held 46 percent ...