Publication Type

Working Paper

Publication Date

5-2016

Abstract

Using a comprehensive sample for 2004–2012, we examine the impact of shareholder activist campaigns on the careers of directors of targeted firms. We find that activism is associated with directors being almost twice as likely to leave—and performance-sensitivity of turnover being higher over the subsequent two-year period. Our evidence suggests that director turnover occurs even without shareholder activists engaging in, let alone winning, proxy contests and, in contrast to most prior research, director election results matter. Overall, our evidence suggests that shareholder activism, even in the absence of proxy fights, is associated with greater accountability for independent directors.

Keywords

Shareholder activism, hedge funds, Independent directors, Director reputation, Accountability, Shareholder voting

Discipline

Accounting

Research Areas

Corporate Reporting and Disclosure

First Page

1

Last Page

60

Publisher

Harvard Business School

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://www.hbs.edu/faculty/Publication Files/14-071_c6c751e0-cf63-4c54-babb-e06fdefef4ac.pdf

Comments

Working Paper 14-071

Included in

Accounting Commons

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