Shareholder activism is an effective way that shareholders can assert their power as owners of a company to influence its behaviour. This is usually done via an active engagement with management, directors, trustees and other stakeholders with the aim to increase shareholder value.
Listed below are documents and internet links which provide information on activist investing.
 Ramius, an activist firm, puts forward its case for shareholder activism. The piece goes through the emergence of activism, its tools, and how the strategy fits in institutional and
high-net worth portfolios.
http://www.scribd.com/doc/10336340/Ramius-Capitals-Case-for-Shareholder-Activism
“Entrepreneurial Shareholder Activism: Hedge Funds and Other Private Investors.” This is
a Journal of Finance paper that discusses the differences between traditional activist
investors and more recent hedge fund activists. The paper also confirms previous
academic findings that activism generates abnormal positive returns.
http://www.hbs.edu/units/am/pdf/hedge fund final draft1.pdf
This journal article looks at activism with particular reference to listed closed-end fund
(similar to LICs in Australia) activism. It looks at what factors attract activists, including
large discounts, costs of communication and governance structures. It also considers the
impact of the 1992 proxy reforms by the US SEC.
http://finance.wharton.upenn.edu/~itayg/Files/cefactivism-forthcoming.pdf
Mercer, the asset consultant, on shareholder activism. In this brief preview article,
it concludes “shareholder activism can lead to improved performance and lower risk.”
http://www.mercer.com/referencecontent.htm?idContent=1302775
CalPERS has a large, well developed governance based investment program. This link is
the CalPERS Corporate Governance website. Amongst other things, it contains the focus
list of companies that CalPERS (and its underlying funds) are targeting for governance
reform.
http://www.calpers-governance.org/investments/charts/
“What matters in corporate governance?” This Journal of Financial Studies paper looks at
what factors really matter in corporate governance. It argues that only six factors really
matter. The authors also suggest that corporate governance firms that follow the “kitchen
sink” approach (that is, a large numbers of governance criteria) may be misguided.
It's about not seeing the wood for the trees.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=593423
This journal article looks at the evidence of activism, finding amongst other things that the
announcement of activist engagements leads to high abnormal returns, and that the authors
find no evidence that activism destroys value or is short term (often leveled as a criticism or
defense by targeted companies).
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=948907
This 2005 journal paper looks into activism and institutional shareholding. It argues that
activism cannot be the panacea for failures in corporate governance. The author makes a
somewhat glib final conclusion: “if it ain't broke, don't fix it.” Obviously, we disagree
wholeheartedly with the premise that it ain't broke!
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=796227&rec=1&srcabs=45100
This journal article looks at the evolution of shareholder activism in the US, beginning with
the establishment of the SEC in the 1930s until the emergence of hedge fund activisms in the
late 1990s.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=959670
Knight Vinke is a large institutional activist investor. They publish a number of their letters to
companies, which make for interesting reading.
http://www.kvamllc.com/home.php
The Official Activist Investing Blog – the name is self explanatory. There are sometimes
interesting posts and links to activist presentations.
http://activistinvesting.blogspot.com/
The Icahn Report (TM) is a blog run by Carl Icahn, one of the most famous individual activist
investors. The by-line for his blog is “A lot of people die fighting tyranny. The least I can do
is vote against it.”
http://www.icahnreport.com/
This journal article looks at the impact of the 1992 proxy reforms by the US SEC on activism
and the costs of communications. It shows that ease of communication and coordination
since the 1992 reforms have made activism more common.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=838165
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