Managerial activism

Şenay Ağca and Asli Togan

Journal of Corporate Finance, 2024, vol. 86, issue C

Abstract: We examine managerial activism through collective action in the corporate sector. Activist managers spend considerable resources in pursuing pro-business and pro-manager issues. While managerial activism is valuable in the pursuit of pro-business strategies, pro-manager agendas may exacerbate agency problems. Our evidence shows that firm performance improves with managerial activism through collective pro-business effort but is diminished by pro-manager activism. Furthermore, pro-business activism typically increases CEO compensation, whereas pro-manager activism decreases it. Firms that benefit most from collective managerial activism are those that are government dependent, have more intangible assets, or operate in industries with low competition. Overall, pro-business managerial activism adds value to firms, especially when information dissemination is more essential due to firm characteristics.

Keywords: Corporate governance; Managerial activism; Lobbying; Firm performance; Corporate social responsibility (search for similar items in EconPapers)
JEL-codes: D7 G14 G18 G34 G38 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:86:y:2024:i:c:s0929119924000506

DOI: 10.1016/j.jcorpfin.2024.102588

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