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1 – 10 of over 2000
Article
Publication date: 12 November 2018

Ambareen Beebeejaun and Jushveer Koobloll

Shareholder activism works when shareholders understand something about the characteristics of the business that the board doesn’t”. As complex the term shareholder activism may…

Abstract

Purpose

Shareholder activism works when shareholders understand something about the characteristics of the business that the board doesn’t”. As complex the term shareholder activism may seem, it demonstrates a very simple phenomenon of how shareholder take control of a situation to turn it in their favor. The whole world has taken an activism “twist” where every person has a word to say. The same characteristic of the society is showcased in this paper where engagement of shareholder is questioned whether it helps to promote effective corporate governance. Given the fact that Mauritius has a rather low shareholder activism framework, this research aims to depict the international picture of the issue at different levels to reach a consensus with the local market. It was a major challenge as very little research has been conducted to accurately contrast shareholder activism with corporate governance. However, the international standards aim at giving a clear picture of how the shareholder activism actually functions.

Design/methodology/approach

The research has adopted a black letter approach by analyzing relevant laws and legislations governing corporate governance matters in Mauritius and the USA, Malaysia, France and South Africa. Thereafter, a comparative analysis was made between Mauritius laws and the aforementioned countries. Recommendations were then put forward on the subject matter which is shareholder activism.

Findings

Research has shown development in corporate governance alongside the increase in shareholder activism. However, these research studies fail to prove that the development is because of shareholder activism itself. In fact, it could be because of increase in corporate intellects, removal of trade barriers, sustainable corporate practices and many such changes that have affected the corporate market somehow. Hence, it is difficult to conclude, with certainty, that the driver of good corporate governance is, in particular, the phenomenon of shareholder activism. Nevertheless, many result of shareholder activism has demonstrated a rather positive impact on the ongoing of the corporate dealings and on a personal note, it can be said that shareholder activism is a domain where much research and development should be effected as it represents a promising improvement in the way corporations are governed.

Originality/value

The concept of shareholder activism is quite new to the Mauritius legislation. There has not been research done on whether shareholder activism, particularly, is the reason for corporate success or failure. In this light, this paper aims to analyze shareholder activism practices in other countries and puts forward recommendation in the Mauritius context which may be of use to stakeholders concerned.

Article
Publication date: 5 March 2018

Feng Zhang, Jianjun Yang, Zhi Xu and Guilong Zhu

Focusing on internal corporate governance, the purpose of this paper is to apply the shareholder activism perspective to consider how large shareholder participation behaviors…

Abstract

Purpose

Focusing on internal corporate governance, the purpose of this paper is to apply the shareholder activism perspective to consider how large shareholder participation behaviors might influence firm innovation performance. Specifically, “confrontationally strategic intervention” and “cooperatively strategic consensus” participation behaviors are examined and hypothesized to have different effects on managers’ risk-taking and firm innovation performance.

Design/methodology/approach

Drawing on 182 Chinese firm samples, this paper applies hierarchical ordinary least-squares regression analysis to test the proposed hypotheses.

Findings

The results show that strategic intervention was negatively associated with managers’ risk-taking and firm innovation performance, while strategic consensus positively affected managers’ risk-taking and firm innovation performance. Moreover, managers’ risk-taking fully mediated the influence of strategic intervention on firm innovation performance, whereas it partially mediated the influence of strategic consensus on firm innovation performance.

Originality/value

The study extends research on shareholder participation by construing that large shareholders’ participation behaviors can significantly influence managers’ risk-taking and corporate innovation performance, further deepening the understanding of the influences of large shareholders on the firm-level outcomes. The theoretical and practical implications of this finding are also discussed.

Details

Nankai Business Review International, vol. 9 no. 1
Type: Research Article
ISSN: 2040-8749

Keywords

Article
Publication date: 3 September 2021

Ulya Yasmine Prisandani

This paper aims to elaborate on the extent to which the Indonesian legal framework has provided room for shareholder activism and the extent to which shareholder activism has been…

Abstract

Purpose

This paper aims to elaborate on the extent to which the Indonesian legal framework has provided room for shareholder activism and the extent to which shareholder activism has been implemented in Indonesia.

Design/methodology/approach

This study combines normative and empirical legal research methods. Indonesian laws and regulations are analyzed aside from the analysis of empirical data and court decisions on shareholder activism implementation.

Findings

Indonesian laws and regulations have accommodated shareholdersactivism and shareholders have started to rectify mismanagement and abuse of power that causes loss to the company through derivative lawsuits. Despite this, Indonesian shareholders are still passive, shown by the number of questions asked in the general meetings of shareholders despite the high attendance percentage. Shareholders have also formed associations to gather more influence on the company’s decision-making process.

Research limitations/implications

The empirical observation in this study was limited to LQ45 companies of the February to July 2021 period. This study can be useful to improve corporate governance and corporate communication in a company to encourage higher participation of individual/minority shareholders. This study also serves as an extension to numerous studies on shareholder protection, corporate governance and corporate law in Indonesia.

Originality/value

Study on shareholder activism in Indonesia is still rare, despite the rising urgency of company supervision and monitoring to prevent mismanagement. To fill in that gap, this research hopes to initiate discussion on shareholder activism in relation to shareholder protection, corporate governance and corporate law implementation.

Details

International Journal of Law and Management, vol. 64 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 16 April 2020

Feng Zhang, Lei Zhu and Liqun Wei

Whether shareholders’ involvement in management benefits the organization’s performance remains inconclusive. The purpose of this study is to reconcile the conflicting results by…

Abstract

Purpose

Whether shareholders’ involvement in management benefits the organization’s performance remains inconclusive. The purpose of this study is to reconcile the conflicting results by exploring whether and under which contexts shareholder involvement may impact firm innovation performance.

Design/methodology/approach

This study attempts to combine previous theoretical views (reactance and agency theories) to examine a curvilinear effect of shareholder involvement on firm innovation performance based on governance related to cost-benefit analysis. Drawing on data from 174 Chinese manufacturing firms, the hierarchical regressions were used to test the hypotheses.

Findings

The study finds that shareholder involvement has a U-shaped relationship with firm innovation performance. Moreover, ownership incentive strengthens the U-shaped relationship, while monitoring weakens it.

Originality/value

Examination of the U-shaped main effect of shareholder involvement and these contingent factors further explains the mixed empirical results concerning the link between shareholder activism and firm-level performance.

Details

Chinese Management Studies, vol. 14 no. 3
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 12 March 2018

Samza Fatima, Tom Mortimer and Muhammad Bilal

This paper aims to analyse a current theme of international interest regarding the increasing role of institutional investors in corporate governance. The role of institutional…

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Abstract

Purpose

This paper aims to analyse a current theme of international interest regarding the increasing role of institutional investors in corporate governance. The role of institutional investors is getting elevated in world’s corporate market day by day due to their large shareholdings and having expertise in investment matters. However, their role and importance has not yet been accepted and explored in Pakistan. Therefore, this paper fills this gap and explores their role in Pakistan’s corporate governance by using a comparative study as to the role of institutional investors in the UK’s corporate governance. This paper identifies the failures of corporate governance in Pakistan and explores how institutional investors can help to overcome these issues.

Design/methodology/approach

This research paper uses a comparative approach based on documentary analysis. It conducts a comparative study of the role of institutional investors and the related code of corporate governance in Pakistan with that of the UK. It analyses the existing studies and the data relating to the role of institutional investors in Pakistan’s corporate governance and formulate recommendations to enhance the role of institutional investors for the betterment of corporate governance practices in Pakistan.

Findings

This paper finds that the role of institutional investors in Pakistan’s corporate governance is under-developed and the fund industry is immature. Though there is a considerable scope for them to work in Pakistan’s business market and play their role in the development of corporate governance in the listed companies of Pakistan. For this purpose, the guidance can be taken form the “Combined Code of the UK”. A number of recommendations have been formulated through which the role of institutional investors can be enhanced for the development of corporate governance practices in the business market of Pakistan.

Originality/value

This paper analyses the role of institutional investors in Pakistan to formulate recommendations through which this role may be enhanced for the development of corporate governance principles and practices in Pakistan. This paper fills a gap in the existing literature relating to the role of institutional investors in Pakistan, as there is a dearth of research in Pakistan concerning this issue. Further, it contributes to the on-going debate on the increasing role of institutional investors in corporate governance more widely.

Details

International Journal of Law and Management, vol. 60 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 23 September 2022

Lidong Wu, Qingyun Wang and Kunkun Xue

Shareholder heterogeneity reflects the interactive relationship between shareholder groups of different industries and ownership types. This paper aims to discuss the impact of…

Abstract

Purpose

Shareholder heterogeneity reflects the interactive relationship between shareholder groups of different industries and ownership types. This paper aims to discuss the impact of shareholder heterogeneity on ambidextrous corporate innovation.

Design/methodology/approach

Combining questionnaire and database data, this study empirically analyzes the internal mechanisms of the impact of shareholder heterogeneity on ambidextrous corporate innovation.

Findings

The authors find that shareholder heterogeneity can promote ambidextrous corporate innovation and that board’s decision-making processes play an intermediary role. Specifically, shareholder industry-type heterogeneity promotes ambidextrous corporate innovation by improving procedural rationality in board’s decision-making process, and shareholder ownership-type heterogeneity promotes ambidextrous corporate innovation by improving political behavior in board’s decision-making process. The analysis of the impact degree shows that shareholder industry-type heterogeneity has a greater impact on exploitation innovation, while shareholder ownership-type heterogeneity has a greater impact on exploratory innovation. In addition, the research also shows that shareholder groups dominated by industry-type heterogeneity have an impact on corporate innovation by shaping an engaged board with higher procedural rationality and lower political behavior. Shareholder groups dominated by ownership-type heterogeneity have an impact on corporate innovation by shaping a contested board with higher political behavior and lower procedural rationality.

Originality/value

This study not only enriches the research on shareholder heterogeneity and corporate innovation in the context of transformation but also provides an analytical framework for research on board’s decision-making process.

Details

Nankai Business Review International, vol. 13 no. 4
Type: Research Article
ISSN: 2040-8749

Keywords

Article
Publication date: 1 March 1994

Martin Fojt

This special “Anbar Abstracts” issue of the International Journal of Retail & Distribution Management is split into six sections covering abstracts under the following headings…

Abstract

This special “Anbar Abstracts” issue of the International Journal of Retail & Distribution Management is split into six sections covering abstracts under the following headings: Business Strategy; Personnel and Training; Marketing and Customer Service; Logistics and Distribution; Financial Management; Information Technology.

Details

International Journal of Retail & Distribution Management, vol. 22 no. 3
Type: Research Article
ISSN: 0959-0552

Article
Publication date: 24 October 2021

Irina Berezinets and Yulia Ilina

This paper aims to deal with the issue of shareholder activism of private equity investors in public companies. The study identifies characteristics of target firms and investors…

Abstract

Purpose

This paper aims to deal with the issue of shareholder activism of private equity investors in public companies. The study identifies characteristics of target firms and investors related to the likelihood of private equity activism. The research also examines whether shareholder activism strategy of private equity investors is associated with the better performance in future and value creation of target firms.

Design/methodology/approach

The paper applies econometric modeling to hand-collected data on private equity investments in listed companies, in the form of private investment in public equity and open-market share purchases, from eight Continental Europe’s countries for the period 2005–2014.

Findings

The findings indicate that the probability of shareholder activism is higher if the target firm’s industry corresponds to the private equity investor’s industry specialization, if the private equity firm is older, if the target is larger and the average ownership share purchased by the investor is higher. Conversely, the probability of shareholder activism is lower where a private equity firm invests in the target for the first time. A target firm with an activist investor has poorer operational performance results one year following the investment compared to a target firm with a passive private equity investor.

Research limitations/implications

Results from the analysis of transactions in Continental Europe countries with French and German legal origin may be not generalizable to other markets with the different legal tradition and institutional environment.

Originality/value

This research provides new empirical evidence on private equity activism in listed companies of Continental Europe. By distinguishing between active and passive investments, testing rarely considered characteristics to provide valuable insights and analyzing the effect of activism on the target firm’s performance, the study contributes variously to the still-limited body of literature on private equity activism in public companies with a governance structure based on concentrated ownership. The findings emphasize the relationship between shareholder activism and both target and investor’s characteristics from perspective of mitigating agency problem and value creation in target firms. By simultaneously investigating investments in public companies from several European markets, the study complements empirical evidence mostly obtained from studies of a single national market.

Details

Studies in Economics and Finance, vol. 39 no. 2
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 10 February 2018

Jörn Obermann and Patrick Velte

This systematic literature review analyses the determinants and consequences of executive compensation-related shareholder activism and say-on-pay (SOP) votes. The review covers…

Abstract

This systematic literature review analyses the determinants and consequences of executive compensation-related shareholder activism and say-on-pay (SOP) votes. The review covers 71 empirical articles published between January 1995 and September 2017. The studies are reviewed within an empirical research framework that separates the reasons for shareholder activism and SOP voting dissent as input factor on the one hand and the consequences of shareholder pressure as output factor on the other. This procedure identifies the five most important groups of factors in the literature: the level and structure of executive compensation, firm characteristics, corporate governance mechanisms, shareholder structure and stakeholders. Of these, executive compensation and firm characteristics are the most frequently examined. Further examination reveals that the key assumptions of neoclassical principal agent theory for both managers and shareholders are not always consistent with recent empirical evidence. First, behavioral aspects (such as the perception of fairness) influence compensation activism and SOP votes. Second, non-financial interests significantly moderate shareholder activism. Insofar, we recommend integrating behavioral and non-financial aspects into the existing research. The implications are analyzed, and new directions for further research are discussed by proposing 19 different research questions.

Details

Journal of Accounting Literature, vol. 40 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 19 September 2022

Pooja Sharma and Shikha Sachdeva

The genesis of “shareholder activism” in the USA may be traced back to several decades, but it only evolved in India at the start of the 21st century. This paper aims to explore…

Abstract

Purpose

The genesis of “shareholder activism” in the USA may be traced back to several decades, but it only evolved in India at the start of the 21st century. This paper aims to explore the concept of “shareholder activism” in the Indian context, in light of the New Companies Act, 2013. The act is envisioned as a precursor to invoking the intention of shareholders to confront managers. Further, it aims to look at the possibilities of using tools of shareholder activism to make companies aware of their concerns.

Design/methodology/approach

Authors explore the concept of shareholder activism with the help of textual analysis, using R. Then, the authors study the mediating effects of “shareholder’s intention towards activism” between the “regulatory mechanisms” and “the usage of various tools of activism”, using the partial least square approach.

Findings

Regulatory mechanisms, such as the Companies Act, 2013, enhance the shareholders’ power to sensitise companies towards various corporate governance issues. It also increases their intention towards shareholder activism, eventually leading to favourable opinion on using various tools of “activism” in their investee companies.

Practical implications

This study is a unique attempt to assess the minority shareholders’ potential to become active in their investee companies induced by changes in the rules and regulations of a country.

Originality/value

Shareholder activism in India has not been thoroughly explored thus far. This paper specifically studies the opinions of retail investors, who possibly could increase companies’ accountability towards their minority shareholders, especially in light of the New Companies Act, 2013.

Details

International Journal of Law and Management, vol. 64 no. 5
Type: Research Article
ISSN: 1754-243X

Keywords

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