These people and organizations have come to define the world of American investor capitalism. Useem notes that company managers, as a result, face several thousand identifiable money managers who look for company competitiveness and results and do not hesitate to clamor for change when firms fall short. While at first glance, it might appear that companies might not welcome the increasing pressure from the hordes of money managers, the improved access to financial markets and funding largely outweighs the impact of the pressure by fund managers. Indeed, both sides stand to gain from the growth of international ownership. Diversification reduces investment risk, so it to the advantage of money managers to spread their risks as far as possible.
Global diversification is advantageous for company executives as well.
By bringing foreign buyers into a company's stock, managers can enhance their firm's market value. Similarly, when company managers list their firms abroad, they often enjoy a significant increase in market worth. As far as we have come, however, the globalization glass is barely half-full and even greater market interdependence can be expected in the future. For corporate executives, then, access to the globalizing equity market can be enhanced by listing their own stocks abroad and reducing restrictions on investors at home. Company leadership increasingly requires a capacity to understand and respond to the concerns of global money managers, who are far less tolerant of languishing results than their predecessors and far more capable of demanding stellar performance.