Sovereign wealth funds and shareholder activism: applying the Ryan‐Schneider antecedents to determine policy implications

Salar Ghahramani (Based at Pennsylvania State University, Abington, Pennsylvania, USA)

Corporate Governance

ISSN: 1472-0701

Publication date: 15 February 2013



The purpose of this paper is to examine the propensity of sovereign wealth funds (SWFs) for shareholder activism and their potential impact on corporate governance.


The study highlights the relationships between SWFs and corporate governance and also applies eight antecedents/determinants of institutional activism to analyze whether SWFs have a predisposition for shareholder activism.


The study only finds two instances of SWF activism. Additionally, it finds that despite their mostly passive investments, SWFs possess a natural tendency toward shareholder activism. Some are more likely to engage in activism than others, however. SWFs with a higher proportion of their assets invested in equities, those with portfolios fully or partially constructed to emulate the broader financial markets through indexing, and those that depend less on external fund managers are the likeliest candidates for activism. The study also finds that the regulatory environment can curb the natural SWF inclination for activist behavior.

Research limitations/implications

Due to the lack of transparency within the SWF universe, this study largely depends on the limited data available for sovereign wealth funds.

Practical implications

Given the growing importance of SWFs, managers, directors, and policymakers must assess SWF activism, its influence on corporate governance, and its implications for public policy deliberations.


This project, to the best of the author's knowledge, is the first study that applies tested financial models to SWFs in order to determine if they have inherent activist tendencies.



Ghahramani, S. (2013), "Sovereign wealth funds and shareholder activism: applying the Ryan‐Schneider antecedents to determine policy implications", Corporate Governance, Vol. 13 No. 1, pp. 58-69.

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