Incentives to Corporate Governance Activism
AbstractThis paper considers incentives faced by investors (financial institutions) to become actively involved in the governance of under-performing companies in their portfolio as recently proposed. By considering the private benefits and the costs of investor activism separately, it questions the conventional wisdom -based on simplistic agency theory - that share ownership is so widely held in the UK that such incentives are too weak for shareholder activism to be a rational basis of a system of corporate governance. It finds that in many cases, by contrast, these incentives would be very strong indeed if conflicts of interest could be avoided.
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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 133.
Date of creation: 04 Jun 2003
Date of revision:
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Corporate governance; shareholder activism; incentives; free-rider problem; agency;
Other versions of this item:
- Leech, Dennis, 2002. "Incentives To Corporate Governance Activism," The Warwick Economics Research Paper Series (TWERPS) 632, University of Warwick, Department of Economics.
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-16 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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