The rise of shareholder engagement and activist investing, especially by hedge funds, during the past two decades has sparked debate across markets, boardrooms and even presidential campaigns: Is shareholder activism good or bad for business? Should managers and board members embrace shareholder engagement? What roles do traditional institutional investors play, especially when engagement escalates into a contest? This six-week elective provides an in-depth analysis of the key issues in shareholder activism and connects it to value investing from the perspectives of activist investors. Moreover, the course also covers perspectives from corporations that are potential targets of aggressive shareholder activism, institutional shareholders, and financial advisors.
- What is shareholder (and especially hedge fund) activism and why has it become important?
- The institutional background and legal rules governing activist investing – disclosure, proxy access, and voting, etc.
- How activism has reshaped corporate policies (including payouts, investments, and governance) and firm boundaries (via asset reallocation and spin-offs/acquisitions). Has activism imposed “short-termist” pressure on corporate managers?
- How can activist investing fit into the broad value investing strategies? What are the sources of superior returns, and more importantly, value creation?
- How do institutional investors decide when/whether to support activist investors or management?
- How should the various constituencies (activists, targets, institutional investors, and financial advisors) work together?
Arthur F. Burns Professor of Free and Competitive Enterprise
Wei Jiang is Arthur F. Burns Professor of Free and Competitive Enterprise in the Finance Division at Columbia Business School. She is also a Scholar-in-Residence at Columbia Law School, a Senior Fellow at the Program on Corporate Governance at Harvard Law School, and a Research Associate of the NBER—Law and Economics. Professor Jiang received her B.A...