Incentives to Corporate Governance Activism
This 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.
|Date of creation:||04 Jun 2003|
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- Tirole, Jean, 1999.
CEPR Discussion Papers
2086, C.E.P.R. Discussion Papers.
- Leech, Dennis & Leahy, John, 1991.
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NBER Working Papers
5554, National Bureau of Economic Research, Inc.
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- 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.
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