In their Principles of Corporate Governance of 2004 the ŒCD adverted that the effectiveness and credibility of the entire corporate governance system will to a large extent depend on institutional investors that make informed use of their shareholder rights and effectively exercise their ownership functions in companies in which they invest. Some years later the European Commission concluded disillusioned that institutional investors have not met their expectations regarding company oversight. How to explain this finding? This study examines the content, economic fundamentals and legal framework of the intracorporate influence of institutional investors on their portfolio companies. The focus is on informal instruments (in particular so-called one-on-ones) whose admissibility under company law is - although being widely used - rarely investigated to this day.