Advising the Management: A Theory of Shareholder Engagement

• 成果类型: Article
• 署名作者: Kakhbod, Ali; Loginova, Uliana; Malenko, Andrey; Malenko, Nadya
• 署名单位: University of California System; University of California Berkeley; University of Michigan System; University of Michigan; Centre for Economic Policy Research - UK; European Corporate Governance Institute
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhac061
• 发表日期: 2023
• 页码: 1319
• 关键词: CORPORATE GOVERNANCE; DISAGREEMENT; OWNERSHIP; Activism; boards; expertise; DECISION; PRIVATE; opinion; signals

摘要

We study the effectiveness of shareholder engagement, that is, shareholders communicating their views to management. When shareholders and management have different beliefs, each shareholder engages more effectively when other shareholders engage as well. A limited shareholder base can thus prevent effective engagement. However, a limited shareholder base naturally arises under heterogeneous beliefs because investors who most disagree with management do not become shareholders. Passive funds, which own the firm regardless of their beliefs, can counteract these effects and improve engagement. When shareholders' and management's preferences are strongly misaligned, shareholders' engagement decisions become substitutes and the role of ownership structure declines.