Less Is More: Making Shareholder Activism A Valued Mechanism Of Corporate Governance

Romanò, Roberta

doi:10.2139/ssrn.218650

Cited by 153 publications

(147 citation statements)

References 9 publications

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“…Shareholder activists put forward proxy proposals at AGMs for raising concern about corporate governance or corporate performance. Firms with poor performance (measured by the market-to-book ratio, operating return, and sales growth) attracted more shareholder-initiated proxy proposals (Karpoff et al, 1996;Romano, 2001). However, Karpoff et al (1996) found little evidence of improvement in operating incomes post proposals and such proposals were found to have negligible effect on company share values and top management turnover.…”

Section: Shareholder Activismmentioning

confidence: 99%

“…Institutional investors have increasingly engaged themselves in corporate governance activities, introducing proxy proposals and negotiating with management for improving corporate performance. Firms with high institutional and lower insider ownership have been targets of shareholder activism to have more probability of success (Romano, 2001). Brav et al (2008) reported that hedge funds are increasingly engaged in shareholder activism and monitoring that differs fundamentally from activism by other institutional investors.…”

Section: Shareholder Activismmentioning

confidence: 99%

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Study on theories and mechanisms of corporate governance

Mishra

Kapil

2017

IJAAPE

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This paper aims to review the theories of corporate governance for understanding the theoretical basis of corporate governance mechanisms. Major theoretical studies on corporate governance, including studies done in emerging economies, are included in the review. The paper looks at corporate governance theories from value creation point of view. It is observed that the two perspectives of corporate governance, i.e., shareholder and stakeholder perspectives, are not in contrast to each other but are pointing towards the same goal, i.e., value creation. However, one points towards value creation for shareholders and the other points towards creation of societal value. While reviewing theoretical underpinnings and assumptions for corporate governance perspectives, due consideration has been given to the development of corporate governance mechanism based on various existing theories. A theoretical framework for understanding the relationship between corporate governance mechanism and corporate performance has been proposed. Emerging challenges for corporate governance theories have also been indicated. This being a review paper, one of the major limitations is an unintentional omission of some literature because of non-availability or non-reachability. Literature that would have been present in languages other than English could also not been included in the review.

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Section: Shareholder Activismmentioning

confidence: 99%

Section: Shareholder Activismmentioning

confidence: 99%

Study on theories and mechanisms of corporate governance

Mishra

Kapil

2017

IJAAPE

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“…While scholars usually interpret shareholder activism in terms of shareholder returns, the rise in shareholder activism over the years has also been motivated by social and moral concerns (Romano, 2001). Social issue advocates, including religious groups, environmental groups, union groups and social investors, buy stock and exercise shareholder rights in an attempt to exert pressure on corporations to change company practices (O'Rourke, 2003;Rehbein, Waddock and Graves, 2004, p. 240).…”

Section: Causes and Forms Of Shareholder Activismmentioning

confidence: 99%

A Good Reputation: Protection against Shareholder Activism

Hoffmann

Brønn

Fieseler

2016

Corp Reputation Rev

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Abstract:When shareholders become dissatisfied with a public company's policies or actions, they may resort to activist interventions. Shareholder activism has been described as an attempt to resolve agency conflicts by directly influencing management or board decisions. Shareholder activism may be incited by a lack of focus on shareholder value, a misalignment of corporate governance, or a number of social and environmental policy issues. Over recent years, shareholder activism has become more frequent, professional, and costly to corporations. Large, visible companies are held to be most susceptible to activist interventions, potentially damaging their corporation reputation. In this study, we analyze the effect of a good corporate reputation on the susceptibility of public companies to shareholder interventions in the form of proxy fights. We consider both the frequency and success of shareholder proposals and differentiate the effect of corporate reputation by issues context. Our findings indicate that a good corporate reputation serves as a two-fold inoculation against shareholder interventions, reducing both the frequency and success of proxy fights.

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“…The resulting codes have generally been drafted by representatives of managers or controlling shareholders. Moreover, those reforms that have been adopted by law-makers have been largely influenced by political entrepreneurs (see Romano, 2005).…”

Section: (Ii) Regulatory Capturementioning

confidence: 99%

“…First, they should devise board election and other shareholder decision-making mechanisms that allow for efficient institutional investor intervention (see, for example, the proposals by Bebchuk (2004) and Romano (2001)). Second, reformers should consider facilitating ex post judicial review whenever the interests of institutional and individual investors are not aligned, or in situations where institutions are not involved-for example when it comes to pension funds.…”

Section: Policy Implicationsmentioning

confidence: 99%

On-Going Board Reforms: One-Size-Fits-All and Regulatory Capture

Hertig

2005

SSRN Journal

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Proponents of board reforms assume that corporate structures and director-specific provisions matter. This paper argues that reformers have set minimum standards, but failed to take into account various trade-offs and regulatory capture effects. It is thus suggested that the flexibility of existing provisions be increased and that this new approach be used to improve shareholder protection against board failures in general and failures of institutional investor boards in particular.

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Less Is More: Making Shareholder Activism A Valued Mechanism Of Corporate Governance

Cited by 153 publications

References 9 publications

Study on theories and mechanisms of corporate governance

Study on theories and mechanisms of corporate governance

A Good Reputation: Protection against Shareholder Activism

On-Going Board Reforms: One-Size-Fits-All and Regulatory Capture

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