Is greater trading liquidity good or bad for corporate governance? We address this question both theoretically and empirically. We solve a model consisting of an optimal IPO followed by a dynamic Kyle market in which the large investor?s private...Read more
This paper reviews the theoretical and empirical literature on the role of blockholders (large shareholders) in corporate governance. We start with the underlying property rights of public corporations; we discuss how blockholders are critical in...Read more
This chapter reviews the single high profile case in which twentieth century antitakeover law has come to bear on management defense against a twenty-first century activist challenge?the Delaware Court of Chancery?s decision to sustain a low-...Read more
Why are shareholder empowerment and activism such controversial issues in the United States today? Other common law jurisdictions, including the United Kingdom, have welcomed and encouraged greater shareholder participation and engagement in...Read more
Union and public pension funds, the most prolific institutional activists employing low-cost targeting methods, are often accused of pursuing private benefits. Extant literature finds that unions representing workers, as stakeholders, are not...Read more
We study investor activism promoting environmental, social and governance (ESG) improvements using a proprietary dataset. Targets have a higher market share, analyst coverage, stock returns, and liquidity. The engagements lead to ESG rating...Read more
Hedge funds have become active in corporate governance. They push for changes in strategy and the adoption of specific business plans. Their tactics include buying shares, conducting public campaigns, lobbying managers and other shareholders,...Read more
Few doubt that hedge fund activism has radically changed corporate governance in the United States -- for better or for worse. Proponents see activists as desirable agents of change who intentionally invest in underperforming
companies to...Read more
Buying and campaigning for control encounter different forms of free-riding in widely held firms. From this we derive a comparative theory of disciplinary governance interventions: First, changes in the marginal return to effort...Read more
Say on pay is considered an important tool to mitigate inappropriate remuneration practices. Over the years, many countries provided shareholders with this say on pay-tool, although often the vote is exclusively of an advisory nature. We analyse...Read more
This article discusses the policy response to hedge funds activism in corporate governance based on Hirschman?s classic: Exit, Voice and Loyalty. From that perspective, the article argues that hedge funds do not create the loyalty concerns...Read more
This paper analyzes the effect that the U.S. Supreme Court’s landmark decision on Citizens United vs. FEC had on corporate political activism. The decision opened the door for corporate treasuries to engage in independent political spending....Read more