Shareholder Activism: What Does It Refer to?1

[ X ]

Tarih

2020

Dergi Başlığı

Dergi ISSN

Cilt Başlığı

Yayıncı

Emerald Group Publishing Ltd.

Erişim Hakkı

info:eu-repo/semantics/closedAccess

Özet

Introduction: Shareholder activism comprises a range of activities by public companies’ shareholders who desire some change in the corporation and intervene in the management’s decisions. The goals of activists are various. They may seek to change the company’s strategy, financial structure, management, or board in general. More specifically they may seek to change the capital allocation strategy (stock buybacks, dividends, or company’s acquisitions policies), the board composition, the company’s executive compensation plans, or the company’s certain functions (risk management, audit). Purpose: The purpose of this literature review research study is to explore the concept of shareholder activism. According to a point of view, these activist actions stimulate better corporate governance practice in the companies and ultimately lead to an increase in the company’s stock price in the short term. The others claim that activism increases the company’s share price volatility in the long term. In the near future, the impact of shareholder activism will continue to rise and the ways how the companies respond to it is gaining importance. This study sheds light on the types of shareholder activism, when they are likely to approach a company and which tactics they most likely use. Methodology: Considering the rapid expansion of shareholder activism concept in the world the author makes a review of literature on shareholder activism. The structure of this chapter is as follows. First, the characteristics of shareholder activism are introduced. Second, the theoretical background of this concept is given in detail. Third, the types of shareholder activism are discussed. Finally, the conclusion comprises a summary of shareholder activism. Findings:The study finds out that shareholder activism has started to have a significant influence on corporate governance policy that a firm adopts in recent years. Shareholder activism increases levels of shareholder engagement in firm decisions and fosters a long-term corporate governance culture. As institutional investors get a higher portion from global equity investments, their role in shareholder activism will increase. There are opinions suggesting that investor activism will lead to better corporate governance practices in firms, leading to an increase in firm share prices in the short term. The shareholder activism phenomenon seems to be on the agenda of all companies in the near future. © 2020 Emerald Publishing Limited.

Açıklama

Anahtar Kelimeler

board of directors, corporate governance, Hedge fund activism, institutional investor, investor relationship management, say on pay, Shareholder activism, shareholder proposals

Kaynak

Uncertainty and Challenges in Contemporary Economic Behaviour

WoS Q Değeri

Scopus Q Değeri

Cilt

Sayı

Künye