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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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:
Contact details of provider:
Postal: Office of the Secretary-General, School of Economics and Finance, University of St. Andrews, St. Andrews, Fife, KY16 9AL, UK
Phone: +44 1334 462479
Web page: http://www.res.org.uk/society/annualconf.asp
More information through EDIRC
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.:
- Andrei Shleifer & Robert W. Vishny, 1996.
"A Survey of Corporate Governance,"
NBER Working Papers
5554, National Bureau of Economic Research, Inc.
- Andrei Shleifer & Robert W. Vishny, 1995. "A Survey of Corporate Governance," Harvard Institute of Economic Research Working Papers 1741, Harvard - Institute of Economic Research.
- Tiroley, Jean, 2000.
CEI Working Paper Series
2000-1, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
- Leech, D. & Leahy, J., 1989.
"Ownership Structure, Control Type Classifications And The Performance Of Large British Companies,"
The Warwick Economics Research Paper Series (TWERPS)
345, University of Warwick, Department of Economics.
- Leech, Dennis & Leahy, John, 1991. "Ownership Structure, Control Type Classifications and the Performance of Large British Companies," Economic Journal, Royal Economic Society, vol. 101(409), pages 1418-37, November.
- Leech, Dennis, 1987. "Ownership Concentration and the Theory of the Firm: A Simple-Game-Theoretic Approach," Journal of Industrial Economics, Wiley Blackwell, vol. 35(3), pages 225-40, March.
- Charkham, Jonathan & Simpson, Anne, 1999. "Fair Shares: The Future of Shareholder Power and Responsibility," OUP Catalogue, Oxford University Press, number 9780198292142.
- Silvio M. Brondoni, 2006. "Managerial Corporate Governance Communication," Symphonya. Emerging Issues in Management, University of Milano-Bicocca, issue 1 Corpora.
- Sreejith Das, 2011. "Criticality in games with multiple levels of approval," Social Choice and Welfare, Springer, vol. 37(3), pages 373-395, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.