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
Citation
SHIN, Sa-Pyung Sean; SHIN, Sa-Pyung Sean; and SRINIVASAN, Suraj.
Consequences to directors of shareholder activism. (2016). 1-60.
Available at: https://ink.library.smu.edu.sg/soa_research/1590
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
http://www.hbs.edu/faculty/Publication Files/14-071_c6c751e0-cf63-4c54-babb-e06fdefef4ac.pdf
Comments
Working Paper 14-071