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Responsible ownership, shareholder value and the new shareholder activism

Author

Listed:
  • John Roberts
  • Paul Sanderson
  • John Hendry
  • Richard Barker

Abstract

In this paper we use interview data to explore the new shareholder activism of mainstream UK institutional investors. We describe contemporary practices of corporate governance monitoring and engagement and how they vary across institutions, and explore the motivations behind them. Existing studies of shareholder activism mainly assume that it is motivated by a desire to maximise shareholder value, and we find some evidence both of this and of alternative political/moral motivations related to ideas of responsible ownership. We conclude, however, that in the current situation both these act primarily as rationalisations rather than as genuine motivators. The main driving force behind the new shareholder activism is the institutions own profit maximisation and the need to position themselves against competitor institutions in the context of political and regulatory changes that have significantly changed the non-financial expectations of their clients.

Suggested Citation

  • John Roberts & Paul Sanderson & John Hendry & Richard Barker, 2004. "Responsible ownership, shareholder value and the new shareholder activism," Working Papers wp297, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp297
    Note: PRO-2
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    File URL: https://www.jbs.cam.ac.uk/cbrwp297/
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    References listed on IDEAS

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    1. Glyn, Andrew & Hughes, Alan & Lipietz, Alan & Sigh, Ajit, "undated". "The Rise and Fall of the Golden Age," WIDER Working Papers 295573, United Nations University, World Institute for Development Economic Research (UNU-WIDER).
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    3. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 91-134.
    4. Blanchflower, D. & Slaughter, M., 1998. "The Causes and Consequences of Changing Income Inequality: W(h)ither the Debate?," Papers 27, Centre for Economic Performance & Institute of Economics.
    5. Kimberly Ann Elliott & Richard B. Freeman, 2003. "Can Labor Standards Improve under Globalization?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 338, April.
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    Cited by:

    1. Caspar Rose, 2012. "The new European shareholder rights directive: removing barriers and creating opportunities for more shareholder activism and democracy," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(2), pages 269-284, May.
    2. Igor Filatotchev & Oksana Dotsenko, 2015. "Shareholder activism in the UK: types of activists, forms of activism, and their impact on a target’s performance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(1), pages 5-24, February.

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    More about this item

    Keywords

    corporate governance; institutional investors; shareholder value; stock market;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G2 - Financial Economics - - Financial Institutions and Services
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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