Optimal Corporate Governance in the Presence of an Activist Investor

• 成果类型: Article
• 署名作者: Cohn, Jonathan B.; Rajan, Uday
• 署名单位: University of Texas System; University of Texas Austin; University of Michigan System; University of Michigan
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hht001
• 发表日期: 2013
• 页码: 985
• 关键词: SHAREHOLDER ACTIVISM; career concerns; BOARD COMPOSITION; reputation; MARKET; OWNERSHIP; form

摘要

We provide a model of governance in which a board arbitrates between an activist investor and a manager facing reputational concerns. The optimal level of internal board governance depends on both the severity of the agency conflict and the strength of external governance. Internal governance creates a certification effect, so greater intervention by the board can lead to worse managerial behavior. Internal and external governance are substitutes when external governance is weak (the board commits to an interventionist policy to induce participation from the activist) and complements when external governance is strong (the board relies to a greater extent on the activist's information).