Governance by Persuasion

The fifth lecture in this series was given by Professor Alon Brav (Duke University and ECGI) on the topic "Governance by Persuasion".

Hedge fund activism refers to the phenomenon where hedge fund investors acquire a strict minority block of shares in a target firm and then attempt to pressure management for changes in corporate policies and governance with the aim to improve firm performance. This lecture was based on a review paper coauthored with Wei Jiang and Rongchen Li in which they provided an updated empirical analysis as well as a comprehensive survey of the academic finance research on hedge fund activism. Prof. Brav provided a brief review of activists' objectives, tactics, and the selection of target companies, and then focus on the current state of the literature, emphasizing how hedge fund activism impacts the target company, its shareholders, other stakeholders, and the capital market as a whole.

Alon Brav is a Professor of Finance at the Fuqua School of Business, Duke University and a faculty research associate at the National Bureau of Economic Research (NBER), Corporate Finance Program. He is an associate editor at the Journal of Finance, a Research Member of the European Corporate Governance Institute (ECGI), and Senior Fellow at the Harvard Law School Program on Corporate Governance.

The public lecture series is organised by Institute for Corporate Governance (ICG), in partnership with the Ostrom Workshop at Indiana University and ECGI.