Over the past 60 years, capital markets in the United States have grown dramatically. For example, in 1950, the market value of all stocks on the New York Stock Exchange (NYSE) was approximately $94 billion, and by 2012 the number had increased to over $14 trillion. (“Institutional Investors: Power and Responsibility,” 2013) This significant market rise has led to an increasing role for institutional investors. The main question surrounding institutional investors is whether they should be more or less involved in the companies whose shares they own. Looking at the important roles along with the influence on corporate governance, we can see that institutional investors have an overall positive impact on society and the individuals who trust them with their investments. Before we get into the specific roles of institutional investors, it is important to first discuss what institutional investors are and how they impact publicly traded companies. Investopedia defines institutional investors as: A person or non-bank organization that trades securities in share quantities or dollar amounts large enough to qualify for preferential treatment and lower commissions. Institutional investors face fewer protective regulations because they are assumed to be better informed and better able to protect themselves (“Institutional Investors Definition,” 2014). Institutional investors come in various forms. The most common institutional investors are mutual funds, exchange-traded funds, pension funds, insurance companies, and hedge funds. Through most of these institutional investors, individuals pool their money and allow fund managers to choose what to buy and what to sell. With these reserves of money... middle of paper... ions. Retrieved February 14, 2014, from http://www.sec.gov/investor/alerts/sayonpay.pdf Institutional Investors: Power and Responsibility. (2013, April 19). Targeted news service. Retrieved from http://search.proquest.com.ezproxy.gvsu.edu/docview/1346403560?accountid=39473Defining Institutional Investors. (n.d.). On Investopedia. Retrieved February 12, 2014, from http://www.investopedia.com/terms/i/institutionalinvestor.aspGillan, S. L., & Starks, L. T. (2003). Corporate governance, corporate ownership and the role of institutional investors: a global perspective. Journal of Applied Finance, 13(2), 4-22. Retrieved from http://search.proquest.com.ezproxy.gvsu.edu/docview/201497886?accountid=39473Tricker, B. (1998). The role of the institutional investor in corporate governance. Corporate Governance: An International Review, 6(4), 213-216. doi:10.1111/1467-8683.00109