The Role of EU Law in Strengthening Corporate Governance via Institutional Investors: Can Pakistan Follow Suit?

Abstract

This research paper aims to explore the legal frameworks governing corporate governance in Pakistan and the European Union (EU) with particular emphasis on the function of institutional investors. However, Pakistan has yet to recognize the impact and importance of the institutional investors. This paper fill this gaps and explores that how the institutional investors have contributed in the development of the corporate governance in wake of financial crisis. For this research, the qualitative doctrinal research methodology is used that is based on documentary analysis. this paper analyses the existing studies, case laws, regulation texts, working papers and content analysis to formulate how the institutional investors supports the transparency, accountability and sustainability in the growth of the corporate governance. This paper finds that the context is important the economic effects institutional investors on the corporate governance and behavior of enterprises. The EU advancements of the measured aspects are sounder and commendable that what specifically Pakistan lacks presently. The findings of the research propose for improved regulatory and legal harmonization, better stakeholder involvement, and the adoption of responsible investing practices are intended to strengthen corporate governance across both regions. This paper potentially fills the gap in the existing literature related to the development of the corporate governance with the virtue of the institutional investors in legal regimes of Pakistan and EU.  There is scarcity of research in Pakistan regarding this issue. Moreover, this paper contributes to the continuing conversation over the expanding global impact of institutional investors on corporate governance.