Investor Relations, Engagement, and Shareholder Activism

• 成果类型: Article
• 署名作者: Chapman, Kimball L.; Miller, Gregory S.; Neilson, Jed J.; White, Hal D.
• 署名单位: Washington University (WUSTL); University of Michigan System; University of Michigan; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University of Notre Dame
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0361
• 发表日期: 2022
• 页码: 77-106
• 关键词: CORPORATE GOVERNANCE; management; analysts

摘要

A dedicated investor relations (IR) function facilitates direct and ongoing dialog between management and shareholders. This paper examines whether this form of engagement mitigates activism that relies upon support from other shareholders. We find that IR engagement is associated with increased investor confidence in management and the board, as well as a lower likelihood of activism, with this deterrent effect becoming stronger when there are fewer frictions surrounding the development of mutual understanding and trust with investors. We also find that when firms do experience an activist campaign, firms with IR engagement have less costly and contentious campaigns, including a lower likelihood of CEO turnover, than those without such a commitment. Taken together, our findings suggest that direct and ongoing IR engagement is an important factor in achieving mutual understanding and trust between the firm and its shareholders, which deters activist investors and mitigates the costly escalation of initiated campaigns.