This paper examines the multifaceted role of institutional investors in enhancing corporate governance. Institutional investors are pivotal stakeholders in contemporary financial markets, wielding significant influence over corporate governance practices. Firstly, institutional investors exert influence through active ownership and engagement with corporate boards and management. By leveraging their substantial ownership stakes, they participate actively in shareholder meetings, vote on critical resolutions, and engage in constructive dialogue to align corporate strategies with shareholder interests. This engagement extends to advocating for transparent executive compensation practices, robust risk management frameworks, and strategic decisions that prioritize long-term value creation. Secondly, institutional investors play a crucial role in developing and adhering to corporate governance guidelines. These guidelines outline best practices for board composition, executive accountability, and disclosure standards, thereby setting benchmarks that promote transparency and accountability within companies. Thirdly, institutional investors wield their proxy voting rights to support governance reforms and shareholder proposals that enhance board independence, strengthen shareholder rights, and improve corporate disclosures. Through strategic proxy voting, they influence corporate behavior and foster greater accountability.