Transformations in Shareholder Activism: Past, Present, and Future

Carine Girard-Guerraud, Jennifer Goodman and Céline Louche ()

Chapter 7 in Recent Trends in Financial Engineering:Towards More Sustainable Social Impact, 2022, pp 133-164 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Shareholder activism, the use of ownership rights to exert influence on investee companies, is not new but is an evolving phenomenon that has made its way into mainstream investment approaches as a powerful means of inciting change in companies. In this chapter, we review not only the past and present of shareholder activism, going back to its origins and mapping the development of both financially and socially motivated activism, but also go further to identify future trends and challenges. Drawing on interviews with international experts from key organizations in the activism universe, we tease out the newest issues, actors, and tactics to give a forward-looking account of where shareholder activism will go next. We identify four new trends, the beneficiary revolution, refining collaboration, a holistic approach, and technological innovation, which stand out as significant shapers of the future direction of shareholder activism. Our analysis of these empirical trends combined with recent research and practical examples indicate some key challenges on the horizon that demand further attention in both research and practice. These challenges are the diversity of demand, democratization, temporality, and increasing polarization between leaders and laggards. These findings have implications not only from a practical investment or management perspective but also for future research in terms of identifying and analyzing potentially unintended consequences of the new trends.

Keywords: Innovation; Equity-Crowdfunding; Capital Structure; Credit Default Swap; Machine Learning: Green Bonds; Impact Bonds; Shareholder Engagement; ESG; Systemic Risk; Sharing Economy; Impact Accounts (search for similar items in EconPapers)
JEL-codes: C02 F3 G3 G32 (search for similar items in EconPapers)
Date: 2022
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