SHAREHOLDER ACTIVISM IN GOOD AND BAD ECONOMIC TIMES

Download This Article

Christoph Van der Elst ORCID logo

https://doi.org/10.22495/cocv8i2sip3

Abstract

Over the last few years the economy shifted from fast growth to a deep financial and economic crisis. Slowly companies are returning to growth rates in 2009-2010 after a sharp fall of profits in 2007-2009. This provides an excellent backdrop to assess trends in shareholder activism, how shareholders responded to the fall in profits and how they have exercised influence in these turbulent times. This paper focuses on the activism exerted by shareholders at annual general meetings of shareholders between 2007 and 2010 via their attendance and voting at AGMs in four European countries. The main research questions answered are the way large and minority shareholders expressed their voice at general meetings of shareholders and what drives this type of shareholder activism. The drivers of shareholder activism at general meetings are empirically tested. Four factors that can influence the willingness and probability of shareholder attendance and voting turnouts that are tested are shareholder structure, corporate performance, institutional framework and size of the companies. Overall shareholder activism measured as the attendance at general meetings between 2007 and 2010 did not significantly change. It is found that the ownership structure and institutional frameworks are important drivers of shareholder attendance. Corporate performance and size have no significant impact on attendance. We conclude that shareholder activism depends on the identity of large individual shareholders shedding doubts on the effectiveness of one size fits all (mandatory) corporate governance measures.

Keywords: General Meeting, Attendance, Voting Behavior, Shareholder Activism, Corporate Governance

How to cite this paper: Van der Elst, C. (2011). Shareholder activism in good and bad economic times [Special issue]. Corporate Ownership & Control, 8(2), 32-43. https://doi.org/10.22495/cocv8i2sip3