Columbia Law School
Sky Blog
activism
Long-Term Economic Consequences of Hedge Fund Activist Interventions
Our new academic study examines the long-term effects of interventions by activist hedge funds. Prior studies document positive equal-weighted long-term returns and operating performance improvements following activist interventions, and typically conclude that activism is beneficial to shareholders. We challenge and …
Wachtell Lipton Discusses the State of Play in Activism
As we approach the 2019 proxy season, developments since September 2017 prompt a brief updated review of the state of play.
- The threat of activism remains high, and has become increasingly global.
- Activist assets under management remain at elevated levels,
Sullivan & Cromwell Discusses Hot Topics in Corporate Governance
Corporate Governance, Surveys, Policies and Reports
- Lazard Report Finds Increased Shareholder Activism in Q1 2018: Lazard’s Quarterly Review of Shareholder Activism for Q1 of 2018 found increased activism by shareholders in terms of number of campaigns initiated, board seats
Wachtell Lipton Discusses Shareholder Activism, Corporate Governance, and the Hunt for Long-Term Value
As the spotlight on boards, management teams, corporate performance and governance intensifies, as articles like the Bloomberg and Fortune profiles of Elliott Management (“The World’s Most Feared Investor—Why the World’s CEOs Fear Paul Singer” and “Whatever It Takes to Win—How …
The Third Stage of Corporate Governance
The recent announcements from major institutional investors about issues such as gender diversity and climate change seem like reactions to social ills. But they are not unmoored from investing. They are logical expressions of a relatively newly empowered, third phase …
Institutional Investor Voting Behavior: A Network Theory Perspective
It is received wisdom that institutional investors have insufficient incentives to cast informed votes because they compete on relative performance. If BlackRock invests in the monitoring of one of its portfolio companies, it will become relatively less competitive vis-à-vis the …
Wachtell Lipton Discusses Deal Activism and the EQT Proxy Contest
“Deal Activism,” in which activists invest to oppose announced deals, has become an increasingly frequent component of the activist playbook. While efforts by the target company’s shareholders to oppose a deal to secure a higher bid have received the most …
Boards Should Use Diversity as a Defense Against Activists
Many institutional investors have made increasing the diversity of corporate boards a priority, yet activist investors that rely on the support of these institutional investors often make boards less diverse. Boards should take advantage of this divergence between the priorities …
Wachtell’s Lipton Reviews the State of Play in Activism
As we approach the start of the 2018 proxy season, developments since January 2015 prompt a brief review of the state of play.
- There has been no slowdown in the U.S.; there has been a significant increase in other countries.
How Investor Activism Affects Corporate Social Responsibility
Prominent activist investors such as hedge funds, pension funds, and influential individual shareholders and families increasingly aim to reshape corporate policies and strategy. In our paper “Shareholder Engagement on Environmental, Social, and Governance Performance”, we use a proprietary …
Law and Corporate Governance
Few research topics over the last two decades have proven as alluring and elusive as corporate governance. Its allure is self-evident: Since the turn of the 21st century, a growing number of pundits, commentators, and scholars have argued that high …
The Case Against Passive Shareholder Voting
In the past few years, investors have begun to embrace the reality that academics have been championing for decades—that a broad-based passive indexing strategy is superior to picking individual stocks or actively managed mutual funds. As a result, millions of …
Wachtell Lipton Discusses the Classified Board Duels
Professor Lucian Bebchuk has engaged in two rounds of law-review-article duels with Professor Martijn Cremers and Professor Simone Sepe over classified boards. The weapons were statistics (and common sense). Cremers and Sepe wore the classified-board-stakeholder colors; Bebchuk, the agency-model-shareholder-democracy colors. …
Board Declassification Activism: Why Run From the Evidence?
Insider Activism
Corporate governance mechanisms that mitigate problems associated with the separation of ownership and control include board monitoring of managers, compensation incentives, a market for corporate control, and government regulation. Recently, shareholder activism has become an increasingly popular tool as well. …
Hedge Fund Activism as a Conflict of Entrepreneurship
Hedge funds have boosted shareholder activism worldwide. In my recent article, I discuss the policy response to hedge fund activism. I argue that the short-termism debate cannot shed light on the desirability of such activism. Rather, hedge fund activism should …
Wachtell Lipton Shines a Spotlight on Boards for 2017
This past year witnessed a number of new corporate governance initiatives. Among the most significant:
- BlackRock, State Street and Vanguard each issued strong statements supporting long-term investment, criticizing the short-termism afflicting corporate behavior and the national economy and rejecting financial
Sullivan & Cromwell Reviews and Analyzes 2016 U.S. Shareholder Activism
Shareholder activism remains a major force in corporate decision-making in 2016 but is increasingly operating in an environment of robust, multi-faceted shareholder engagement, particularly at large companies. The time and effort that companies and institutional investors have spent developing a …
Ropes & Gray Discusses Recent Proxy Access Developments
To date, nearly 300 companies have adopted proxy access bylaws, including over 40 percent of S&P 500 companies. Given the widespread adoption of proxy access by large U.S. companies, it was only a matter of time before a shareholder actually …