This paper examines the role of institutional investors in corporate governance under concentrated ownership structure by investigating the changes of shareholding around chairman of board and CEO turnovers in Taiwan listed market. The result reveals that institutional investors are more likely to sell their shares as passive shareholders to influence corporate decisions in firms under concentrated family control.
Furthermore, considering the ability of outside successors in altering the directions of a firm, the intention of institutional selling prior top management turnovers is illustrated by different ownership change patterns between outside succession versus inside succession, suggests satisfactory result of corporate decisions influence to some
institutional investors post top management turnovers. Empirical tests relating the changes in institutional holdings and corporate governance attributes indicate only partially support for institutional selling power to significantly influence corporate governance.
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