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Abstract

Recent literature suggests that control of corporations has shifted from individual capitalists to financial institutions. The article, based on original research, examines the relationship between ownership and control in relation to one set of financial institutions, namely pension funds.

Focusing particularly on the role of employee representatives on trustee boards of pension schemes, the authors first suggest that the notion of ownership is even less clearcut in the case of pension funds than it is for public corporations. Recognition of pensions as deferred pay implies that the funds should belong to the scheme members, but ownership rights are severely circumscribed. Turning to the control issue, the authors report first on the recent increase in employee representation; they look at the content of decision-making, focusing specifically on three areas: investment, information and the selection of professional staff; and then examine the structure of decision-making, looking both at institutional features (e.g. the relation between participation and collective bargaining) and financial practices. They conclude by stressing the diversity of types of influence exercised, suggesting the presence of complex and multiple relationships between ownership and control.

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Forms of Ownership and Control: Decision-Making within a Financial Institution

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