Essays on Corporate Governance and Shareholder Activism PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Essays on Corporate Governance and Shareholder Activism PDF full book. Access full book title Essays on Corporate Governance and Shareholder Activism by Sa-Pyung Shin. Download full books in PDF and EPUB format.
Author: Sa-Pyung Shin
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
In these essays, I explore the relation between shareholder activism and corporate governance, mainly the board of directors and takeover defense measures.
Author: Sa-Pyung Shin
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
In these essays, I explore the relation between shareholder activism and corporate governance, mainly the board of directors and takeover defense measures.
Author: Ms. Nadya Malenko
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
This dissertation provides a theoretical analysis of several corporate governance mechanisms in the presence of information asymmetries and agency conflicts between shareholders, managers, and directors. The first essay of the dissertation analyzes decision-making in corporate boards and studies how board characteristics and the design of board meetings affect board decisions. Two other essays are on shareholder activism. The second essay focuses on voting for non-binding shareholder proposals and examines its effectiveness in conveying shareholder views to the management. The third essay considers another common form of shareholder activism, private negotiations with the management, and studies the activist's choice between private negotiations and public confrontation. The first essay, "Communication and Decision-Making in Corporate Boards, " develops a theory of communication and collective decision-making in a board of directors whose members have private information about the issue under discussion. The key element of the model is that the quality of board communication is endogenous, because it depends on the time and effort directors are willing to put into communicating their information to others. Directors may have biases regarding the decision and may be reluctant to disagree with the prevailing opinion in the boardroom. I show that when effective communication is personally costly for directors, both stronger preferences for conformity and stronger biases may improve the board's decisions because directors will have stronger incentives to convince others of their position. These results have implications for the design of board policies, including the use of open vs. secret ballot voting, the establishment and composition of committees, and the frequency of executive sessions of outside directors. The second essay, "Non-Binding Voting for Shareholder Proposals, " which is co-authored with Doron Levit and is forthcoming in the Journal of Finance, considers another setting where information relevant for the firm's decisions is dispersed among many agents, namely, the firm's large shareholders. Our main question is whether voting for non-binding shareholder proposals fulfills its intended role of conveying shareholders' expectations to the management. We show that when the interests of the manager and shareholders are not aligned, non-binding voting generally fails to convey shareholder views to the manager. This distinguishes voting for non-binding proposals from standard voting for binding proposals, where some information is always conveyed. In practice, the effectiveness of shareholder proposals may be affected by external governance mechanisms, such as the market for corporate control in the form of activist investors. Our analysis demonstrates that the presence of an activist investor can enhance the advisory role of non-binding voting only if there is substantial conflict of interest between the activist and shareholders. Although shareholder proposals have become increasingly common in recent years, submitting a proposal to a shareholder vote is often viewed by activist investors as a tactic of last resort. According to survey evidence, activists generally try to achieve their objectives through private negotiations with the management and use confrontational tactics only if these negotiations are not successful. The third essay, "Behind-the-Scene Negotiations in Shareholder Activism, " examines under which circumstances negotiations between the activist and the management fail. I study these negotiations in a bargaining framework where the manager is privately informed about his private benefits. The model provides implications for the likelihood of proposal withdrawals and announcement effects of proposal submissions. It demonstrates, in particular, that the announcement of an activist's intervention may have a negative price effect even if the intervention is known to be beneficial to the company.
Author: Marcel Maier
Publisher:
ISBN: 9783750240575
Category :
Languages : de
Pages :
Get Book Here
Book Description
Author: Mr. Doron Yizhak Levit
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
My dissertation is focused primarily on the effect of communication between shareholders, senior management, and the company's board of directors, on the governance of the firm. In the first study I explore the advisory role of a target company board in takeovers. I show that coordination failures among target shareholders, such as free-riding, limit the board's ability to properly advise shareholders whether accepting a takeover offer is in their best interest based on its information. I demonstrate that even if there are no agency problems and the board's objective is to maximize shareholders' value, the board conceals information from shareholders in equilibrium, and shareholders might be better off if they could commit to ignoring the board's advice. By contrast, when the board is biased and behaves opportunistically, it becomes possible for information to be fully revealed and, consequently, shareholders' welfare might increase. More broadly, the study emphasizes the potential value of an expert's bias when advising a group of agents whose collective actions must be coordinated. I discuss shareholder activism in takeovers and communication during debt restructuring as examples for possible applications. In the second study (joint work with Nadya MalenkoSPAN class=skype_name_highlight_offline title=nadya.zhukova height="12px" width="15px" SPAN class=skype_name_mark begin_of_the_skype_highlighting SPAN class=skype_name_mark end_of_the_skype_highlighting ) we analyze whether non-binding voting for shareholder proposals is an effective mechanism for conveying shareholder expectations. Shareholder proposals are a common form of shareholder activism. Voting for shareholder proposals, however, is non-binding in the sense that the management has the authority to reject the proposal even if it received majority support from shareholders. We show that in contrast to binding voting, non-binding voting generally fails to convey shareholder views when the interests of the manager and shareholders are not aligned. Surprisingly, the presence of an activist investor who can discipline the manager may enhance the advisory role of non-binding voting only if there is substantial conflict of interest between shareholders and the activist. In the final part of the dissertation, I study the implications of board members' expertise, and concerns for being seen as experts, on the incentives of the manager to collect information and communicate it to the board. The expertise of the board is particularly important in times when shareholders cannot rely on the manager to provide information. Our results demonstrate that even when the board acts in its shareholders' best interests, the board's expertise can harm shareholders' value by discouraging an opportunistic manager from collecting valuable information. This effect takes place exactly in times when a priori the manager and shareholders disagree on the optimal strategy. Moreover, we show that concerns for its reputation induce the board to act more like an expert, even when it is not. The board under-reacts to useful public information, and thereby gives more power to the manager on the expense of shareholders' value.
Author: Abhishek Ganguly
Publisher:
ISBN:
Category : Chief executive officers
Languages : en
Pages : 183
Get Book Here
Book Description
My dissertation comprises three essays that address several unanswered and unsettled questions on the role of institutional investors as external monitors. In the first chapter titled, "Media and Shareholder Activism," using more than twenty-five million firm-level media articles, I examine the role of media in shareholder activism events from 2002 to 2014. I find that conditioning on numerous observable firm-specific characteristics and unobservables, broader and negative ex-ante media coverage, is positively associated with the probability of a firm being a shareholder activist's target. I further document that media coverage also plays a crucial role in determining the outcomes of activism events. Target firms with ex-ante positive media coverage not only have significantly lower announcement returns but also have a higher likelihood of management winning. The second chapter titled, "CEO Overconfidence and Shareholder Activism," relies on extensive behavioral corporate finance theory and empirically explores whether managerial overconfidence is associated with hedge-fund activists' target selection and activism outcomes. Predictions from theoretical models point in different directions: activists mitigate overconfidence or activists avoid overconfident managers. We find evidence that hedge-fund activists are less likely to target firms with overconfident CEOs, after controlling for various firm and CEO characteristics and fixed effects. In the third chapter, "Hedge Fund Activism and Capital Structure," using a comprehensive sample of hedge-fund activism from 1994 to 2018 in the U.S., and closest propensity score-matched firms, we study whether hedge-fund activists influence the capital structures of targeted firms. We find that for over-levered firms, there is a significant positive association between firms' distance away from the target leverage and their likelihood of being targeted by an activist hedge-fund. However, rebalancing of leverage toward their target debt ratios post-hedge fund activist intervention is observed only among under-levered firms. Our findings are broadly consistent with the dynamic trade-off models of capital structure, where adjustment costs and agency benefits of leverage play a crucial role.
Author: Ekrem Solak
Publisher: Routledge
ISBN: 1000069745
Category : Law
Languages : en
Pages : 237
Get Book Here
Book Description
This book provides a complete framework for contemporary shareholder activism and its implications for US corporate governance, which is based on director primacy theory. Under director primacy theory, shareholders do not wish to be involved in the management of the company; in the rare event that they wish to be involved, it is considered a transfer of power from the board of directors to shareholders, which in turn reduces the efficiency of centralised decision-making in public companies. However, this book demonstrates that shareholders do not use their power to transfer corporate control from the board to themselves, and that some form of shareholder activism is even collaborative, which is a new paradigm for US corporate governance. This book shows that while monitoring remains a key contribution of shareholders, they also bring new informational inputs to corporate decision-making that could not be obtained under the traditional board model. Accordingly, contemporary shareholder activism enhances the board’s decision-making and monitoring capacity, without undermining the economic value of the board's authority. Therefore, this book argues that the complete approach of contemporary shareholder activism should be accommodated into US corporate governance. In doing so, this book considers not only legal and regulatory developments in the wake of the 2007–2008 financial crisis, but also the governance developments through by-law amendments. Furthermore, the author makes several recommendations to soften the current director primacy model: establishing a level playing field for private ordering, adopting the proxy access default regime, the majority voting rule, the universal proxy rules, and enhancing the disclosure requirements of shareholders. The book will be of interest to academics and students of corporate governance, both in the US and internationally.
Author: Tanja Artiga Gonzalez
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Get Book Here
Book Description
This thesis empirically investigates three research questions in the area of corporate finance. In Chapter 1 we investigate the disclosure and governance practices of more than 200 U.S. companies accused by government authorities of participating in price fixing cartels. These firms earn strong cash flows, and continuation of their schemes requires obfuscation of their windfalls from regulators, analysts, customers, and even their own auditors and boards of directors. Chapter 2 studies coordinated shareholder activism campaigns, i.e., multiple activists simultaneously targeting the same firm. Using a unique and comprehensive database of activism events we document that activists prefer to participate in coordinated campaigns. Consistent with activists working together, we find that this phenomenon is more prevalent among geographically proximate activists where frictions to coordination are lower. We posit that coordinated campaigns are a mechanism through which activists can mitigate free-rider problems. Consistent with this hypothesis, we find that coordinated campaigns are more prevalent where the free-rider problems faced by activists are greater. In Chapter 3, using a sample of lead and presiding directors of S & P 500 firms we examine the effectiveness of this board position. This paper shows that firm value is not affected by the leadership structure with regard to the independent board leader. However, we find evidence that firm value is affected by the choice of the lead director. Lead directors who receive a high retainer are associated with lower firm value. Paid lead directors are also associated with higher discretionary accruals whereas a lead director who is appointed to all three mandatory board committees reduces the probability of restating the financial statement. Total CEO compensation does not depend on the leadership structure of the firm. However, performance based compensation is higher for firms with.
Author: Lukai Yang
Publisher:
ISBN:
Category : Electronic dissertations
Languages : en
Pages :
Get Book Here
Book Description
In the first essay, we study whether the increasingly large and concentrated ownership stakes by passive investors influence shareholders activism in the form of shareholder proposals. We find a positive association between passive ownership and the total number of proposals initiated, proposals with different types of sponsors, the rate of proposal withdrawal, vote-for percentage, and finally 1-year abnormal returns following the annual meeting date at which time the proposals were put forth. To mitigate endogeneity concerns, we use the Russell reconstitution as an exogenous shock. Our findings highlight the ability and power that passive investors have to affect corporate policy by supporting fellow shareholder sponsored proposals.In the second essay, we investigate the effectiveness of shareholder voice. In 2017, The Big Three institutional investors launched campaigns to increase gender diversity on corporate boards. We estimate that their campaigns led firms to add at least 2.5 times as many female directors in 2019 as they had in 2016 and to promote female directors to key board positions. Firms increased female representation by relying less on managers existing networks to identify candidates and by placing less emphasis on candidates executive experience. Our results highlight index investors ability to influence firms governance structures and shareholder advocacy's potential to expand women's participation in corporate leadership more extensively than government mandates. In the third essay, we examine whether and how local religiosity has an impact on corporate attitude towards corporate social responsibility (CSR) activities and how CSR activities directly impact firm value. Employing an extensive US sample from 1991 to 2015, we find that firms headquartered in more religious regions undertake a greater level of CSR activities. Furthermore, the CSR activities of firms located in highly religious regions are positively valued in the stock markets as we observe a positive association between CSR and Tobin's Q for the companies that are headquartered in high religious regions. The association is stronger when firms are less visible to non-local investors. This study enriches the emerging literature on the influence of local cultural factors on corporate behavior and encourages future research on the various aspects of how the local environment impacts firms ethical behaviors.
Author: Donald H. Chew
Publisher: Columbia University Press
ISBN: 9780231519984
Category : Business & Economics
Languages : en
Pages : 388
Get Book Here
Book Description
Corporate governance constitutes the internal and external institutions, markets, policies, and processes designed to help companies maximize their efficiency and value. In this collection of classic and current articles from the Journal of Applied Corporate Finance, thought leaders such as Michael Jensen and Robert Monks discuss the corporate mission of value maximization and the accomplishments and limitations of the U.S. governance system in achieving that end. Essays address the elements driving corporate value: the board of directors, compensation for CEOs and other employees, incentives and organizational structure, external ownership and control, role of markets, and financial reporting. They evaluate best practice methods, challenges in designing equity plans, transferable stock options, the controversy over executive compensation, the values of decentralization, identifying and attracting the "right" investors, the evolution of shareholder activism, creating value through mergers and acquisitions, and the benefits of just saying no to Wall Street's "earnings game." Grounded in solid research and practice, U.S. Corporate Governance is a crucial companion for navigating the world of modern finance.
Author: Tim Bowley
Publisher: Bloomsbury Publishing
ISBN: 1509952241
Category : Business & Economics
Languages : en
Pages : 243
Get Book Here
Book Description
This book explores the regulatory challenges of public company shareholder activism. Around the world, policy makers, practitioners and academics debate how best to regulate shareholder activism. Using Australia as a case study, the book examines key issues raised by this debate. With a market structure and legal settings that are conducive to activism, Australia makes an ideal case study and provides a fresh comparative perspective on the regulatory debate about shareholder activism, which tends to be dominated by US-focused analysis and commentary. The book presents empirical evidence which reveals that Australian activism is a significant and multifaceted phenomenon, undertaken by different types of activists pursuing varying strategies and supported by a range of complementary market developments. The book uses this evidence to develop comparative insights and explore internationally topical issues, including: - activists' willingness to use interventionist governance rights; - the role of intermediaries such as proxy advisers in facilitating activism; - institutional investor stewardship; and - the risks of collective shareholder activism. This book provides an important comparative perspective on the topic of shareholder activism. It is an essential resource for policy makers, practitioners and academics interested in the regulatory implications of shareholder activism.
