Over the past decades, global capital markets have undergone a significant transformation. Large institutional investors now hold substantial stakes in listed companies across jurisdictions and cross‑border ownership has become a defining feature in many markets. Concurrently, there has been a marked shift towards index-based investment strategies, driven by cost-efficiency considerations and enabled by technological advances.
The consolidation of voting power – where a small number of large institutional investors hold a significant proportion of voting rights in listed companies – raises important questions. If not properly governed, such concentration may present risks. At the same time, some institutional investors are under pressure to address environmental and social challenges through their investment decisions and stewardship practices including engagement and voting.
The Institutional Investor Engagement and Stewardship report examines how institutional investors engage with listed companies and how effective stewardship can strengthen the long-term efficiency and resilience of capital markets. It presents trends in institutional ownership and the asset management industry; reviews current engagement practices and mechanisms; and analyses stewardship-related regulatory frameworks, including fiduciary duties. Although the regulatory frameworks governing stewardship have evolved in many jurisdictions over the last decade, frameworks have not always kept pace with these challenges. This report highlights the need for enhanced international co‑operation to identify and promote both voluntary and regulatory approaches that support effective stewardship.
This report has been developed by the Capital Markets and Financial Institutions Division of the OECD Directorate for Financial and Enterprise Affairs. It was prepared by Adriana De La Cruz and Hitesh Tank, with the support of Matthis Cadeau, under the supervision of Caio de Oliveira, Head of the Sustainable Finance and Corporate Governance Team, and Serdar Çelik, Head of Division. Inputs were provided by delegates at the OECD Working Party on Sustainable Finance’s inaugural September 2025 meeting, the Corporate Governance Committee’s Fall 2024 meeting and the Committee on Financial Markets’ Spring 2024 meeting.
The report also reflects input received through a private consultation held in March 2025 with the following organisations and individuals: Brazil’s Association of Capital Market Investors (AMEC) (Fabio Coelho), BlackRock (Amra Balic and Laetitia Boucquey), Climate Action 100+ and the Principles for Responsible Investment (PRI) (Jasna Selih and Junru Liu), Dr Tom Gosling (London School of Economics), Glass Lewis (Eric Shostal and Gordon Seymour), Institutional Investors Group on Climate Change (IIGCC) (Laith Cahill), Japanese Government Pension Fund (GPIF) (Hitoshi Hirokawa), Norges Bank Investment Management (NBIM) (Elisa Cencig), Professor Dorothy Lund (Columbia Law School), Professor Julian Franks (London Business School), UK Financial Conduct Authority (FCA) (Isabelle Lambert and Serena Espeute) and the UK Financial Reporting Council (FRC) (Dandi Wang and Olivia Mooney).