From conflict to coordination: the governance role of bank-involved investor cliques in Japan

Abstract
The role of bank-affiliated investors in shareholder meetings remains unclear, as their interests often align with those of their parent banks. This study examines how sub-communities of institutional investors (“cliques”) influence governance when their interests align with banks. We employ shareholder meeting data and reveal that these cliques cast more dissenting votes against “bad” proposals while supporting “good” proposals. Furthermore, although bank-affiliated funds typically vote favorably for management proposals, cliques including main bank-affiliated funds, are more likely to oppose problematic proposals. These findings suggest that clique coordination mitigates investors’ conflicts of interest when they exercise their voting rights.

Authors: Ryosuke Fujitani, Akitoshi Ito, Kiyonori Iwata

ICS Faculty:  Ryosuke Fujitani

Published in: Finance Research Letters

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https://doi.org/10.1016/j.frl.2025.108119