Maria Goranova

Shareholder Activism A Multidisciplinary Review

Shareholder activism has become a dynamic institutional force, and its associated, rapidly increasing body of scholarly literature affects numerous disciplines within the organization science academy. In addition to equivocal results concerning the impact of shareholder activism on corporate outcomes, the separation of prior research into financial and social activism has left unanswered questions critical for both the scholarly discourse on shareholder activism and the normative debate on shareholder empowerment. The heterogeneity of factors in shareholder activism, such as the firm, activist, and environmental characteristics that promote or inhibit activism, along with the breadth of activism’s issues, methods, and processes, provide a plethora of theoretical and methodological opportunities and challenges for activism researchers. Our multidisciplinary review incorporates the financial and social activism streams and explores shareholder activism heterogeneity and controversy, seeking to provide an impetus for more cohesive conceptual and empirical work in the field.

Shareholder Empowerment: An Introduction

Recent trends in shareholder empowerment have spurred a heated debate about whether empowered shareholders will ultimately cure corporate ills or adversely affect corporate fortunes. Publicly traded corporations are uniquely positioned to facilitate financial risk bearing, due to their dispersed ownership and liquidity and shareholders’ ability to diversify their financial risk (Easterbrook & Fischel, 1985). They have not only served as “the main engine of economic progress” in the twentieth century (Jensen, 1989: 61), but have also driven social progress by facilitating professionalism, upward mobility, and meritocracy, as well as by providing job stability, and retirement and health care benefits (Davis, 2011, 2013; Demsetz, 1983). The United States “owed everything to the corporation,” writes Beatty (2001), tracing the very development of democracy in the United States to the morphing of early settler companies into a commonwealth. Yet views on corporations have polarized from “the basis of the prosperity of the West and the best hope for the future of the rest of the world” (Micklethwait & Wooldridge, 2003) to the critical query, “are corporations evil?” (Litowitz, 2003).

Principal Costs: Reversing the Polarity of the Principal-Agent Dyad

Despite the diversity of topics addressed in the extensive research on principal-agent relationships (i.e., agency theory), we suggest that an unfortunate common denominator has been a one-sided de...

Perspectives on Strategic Implications of Shareholder Activism

Shareholder activism has attracted significant attention in research ranging from finance to strategy, management, and organizational theory, as the phenomenon has become increasingly prominent in the last few decades. However, strategic implications of shareholder activism have remained vague. Specifically, the papers take the perspective of activists and other shareholders, of the management of targeted firms, and of the management of non- targeted firms. By bringing these perspectives together, we aim to expand current literature and raise important questions regarding the strategic implications of shareholder activism that can affect diverse stakeholders. Shareholder Engagement in the Face of Conflicting Shareholder Interests Presenter: Maria Goranova; U. of Wisconsin, Milwaukee Presenter: Lori Verstegen Ryan; San Diego State U. Examining Focus and Style as Predictors of Activist Investors Rates of Success Presenter: Christine Shropshire; Arizona State U. Presenter: Jisun Kim; U. of Mississippi The Ri...