Regarding how block ownership affects corporate governance, there is a dispute. According to several academics, significant shareholders influence the governance of the company. According to some, large shareholders favor companies with strong governance. This is the well-known “chicken and egg” debate. Which came first, the ownership structure or the governance of the company is uncertain. The ownership structure and governance of the company most likely develop endogenously and are jointly influenced by other factors. Blockholders are presumptively able to affect the governance structure of the company in three different ways. As follows: By electing directors and engaging in shareholder activism, block holders help the company’s governance practices. Even a shareholder with a modest ownership holding of 10% or less can exert significant influence over the board of directors and the selection and removal of senior executives. Blockholders are always free to leave (sell their shares). This withdrawal threat also carries the potential of a hostile takeover. The danger itself can assist control management and lower agency expenses. The corporate governance of the company may be badly impacted by block holders. If stockholders are driven by the desire to extract personal rewards of control, this may occur.