Over the past few decades, global capital markets have experienced profound changes. Large institutional investors now hold substantial equity stakes in listed companies across jurisdictions, and cross‑border ownership has become a defining feature of many markets. Asset managers alone control more than 50% of the listed equity in the United States, the United Kingdom and Ireland, and at least 20% of the listed equity in Brazil, India and South Africa. The largest 20 asset managers control USD 56 trillion (38%) of assets globally. Concurrently, index-based investment strategies have expanded markedly, driven by cost-efficiency considerations and enabled by technological advances. Globally, non-index managed investment funds total USD 38.3 trillion of assets under management, while index-linked funds account for USD 26.7 trillion (OECD, 2025[1]).
In some smaller markets, such as Estonia, Luxembourg and the Slovak Republic, the largest institutional investor in each company owns more than 70% of the institutional investor equity holdings on average. In larger markets such as the United Kingdom and the United States, institutional ownership shows high concentration levels when measured using the largest 20 institutional investors in each company (OECD, 2025[1]). Given their scale and influence, institutional investors are important contributors to capital market efficiency and integrity and can help strengthen market discipline and the accountability of corporate boards.
Institutional investors encompass a wide range of entities that own and manage assets. Asset owners are a subset of institutional investors that invest their assets directly or through asset managers. Asset owners include entities such as insurance companies, pension funds, and sovereign wealth funds. Asset managers, in turn, manage assets on behalf of other entities and individuals. Depending on the regulatory context and investment strategies, asset managers include investment advisors, hedge funds and private equity firms, among others.
As institutional investors have become the primary owners of public equities, policymakers and regulators need clearer considerations on how to assess the legal, regulatory and institutional frameworks that enable institutional investors to discharge their stewardship responsibilities, with a view to supporting economic efficiency, financial return and fiduciary obligations. While the G20/OECD Principles of Corporate Governance (hereafter the “G20/OECD Principles”) focus on publicly traded companies (OECD, 2023[3]), they include certain recommendations relevant to stewardship-related issues. This paper has been developed with intent to ensure consistency with the G20/OECD Principles, while extending to some policy areas not covered by them.
Stewardship refers generally to the responsibilities of institutional investors in overseeing and engaging with issuers, with the aim to increase the financial value of investments on behalf of their clients. While these policy considerations focus on institutional investors as the primary holders of stewardship responsibilities, they also include considerations for entities and professionals that support institutional investors in carrying out these functions (referred to in this paper as “market service providers”).
Institutional investors differ in portfolio diversification, strategy, expertise, investment horizons and size. Accordingly, there is no single model of effective engagement and stewardship. In certain circumstances, provided this is clearly disclosed, it may be reasonable for an institutional investor to adopt a business model that does not involve engagement activities or may seek to obtain non-financial objectives. The policy considerations in this paper identify common elements that underpin effective stewardship and disclosure across different types of institutional investors, while also including considerations targeted, where relevant, to specific types of institutions.
The policy considerations seek to identify good practices and suggest possible means for achieving them, building on the research and analysis in the report Institutional Investor Engagement and Stewardship (OECD, 2025[1]) and The Role of Capital Market Service Providers in Corporate Governance (OECD, 2026[2]). The policy considerations are addressed primarily to policymakers and regulators, while recognising that industry bodies and institutional investors may also support related market improvements.