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Investors are called to be good stewards/trustees of their investments, often on behalf of third parties. In light of this fiduciary responsibility, and the conundrum of public criticism potentially impacting on share price, this paper aims to use the basis of the UK governance code to explore what important dialogue investors really have with their holdings to support good governance.

Semi-structured telephone interviews with eight institutional investors explore governance issues and investor company dialogue, giving insights into the aspects of the importance of their part in the UK corporate governance code.

Rather than being sleeping lions, investors positively engage with companies, with regular communication being high on their agenda and not always via the annual general meeting. There is a preference to engage directly with the company rather than in public view or via share dumptin. Thus, we often do not see their actions around their fiduciary duties as often they avoid public criticism or any visibility that could do reputational harm and decrease company value.

This dialogue was just before the point of the exposure of the financial crisis; however, it shows the importance that investors give to taking their responsibilities seriously. Importantly, it provides a springboard for further debate following the financial crises and the updates of the financial environment.

Even though policy seeks engagement, the nuances of the investor dialogue are under explored compared to visible quantitative metrics. This dialogue assures that investors are active, even if their engagement is not public and can be deemed as hidden.

Complementing quantitative studies, this paper explores a qualitative approach, uniquely sharing insights into a hidden and little explored world of fiduciary dialogue.

The purpose of this paper is to use a sample of UK entrepreneurial initial public offering (IPO) companies to investigate whether they change their compensation strategies as they undertake the crucial transformation of the business from private to public status.

The paper uses the agency perspective to underpin an examination of the changes within the compensation packages of companies at the stage of the initial public offering, particularly with regard to the use of executive director incentive schemes, and compares this to “best practice” guidelines issued within the UK.

The paper discovers that even though incentive schemes are adopted, the majority are unconditional and requiring only an improvement in share price and the executive to remain employed in order for gains to be made. The general finding is that before IPO most companies did not have an incentive pay scheme in place, and those that did, operated unconditional option schemes. However, after IPO most companies introduced an incentive pay scheme, but the majority were unconditional rather than conditional (i.e. schemes requiring executives to meet pre‐determined performance criteria – as recommended by “best practice” guidelines).

The paper exposes that, contrary to “best practice” guidelines and regulations, many of these schemes reward executives unconditionally with the only factor being them remaining in employment over the vesting period. Despite “best practice” and regulations, firms still appear to be defensive and protect the executives from rigorous scrutiny by shareholders.