Stakeholder activism, managerial entrenchment, and the congruence of interests between shareholders and stakeholders
Cespa, Giovanni
Cestone, Giacinta
Universitat Autònoma de Barcelona. Unitat de Fonaments de l'Anàlisi Econòmica
Universitat Autònoma de Barcelona. Institut d'Anàlisi Econòmica

Date: 2006
Description: 24 p.
Abstract: We argue that when stakeholder protection is left to the voluntary initiative of managers, concessions to social activists and pressure groups can turn into a self-entrenchment strategy for incumbent CEOs. Stakeholders other than shareholders thus benefit from corporate governance rules putting managers under a tough replacement threat. We show that a minimal amount of formal stakeholder protection, or the introduction of explicit covenants protecting stakeholder rights in the firm charter, may deprive CEOs of the alliance with powerful social activists, thus increasing managerial turnover and shareholder value. These results rationalize a recent trend whereby well-known social activists like Friends of the Earth and active shareholders like CalPERS are showing a growing support for each other's agendas.
Rights: Aquest document està subjecte a una llicència d'ús de Creative Commons, amb la qual es permet copiar, distribuir i comunicar públicament l'obra sempre que se'n citin l'autor original, la universitat, la unitat i l'institut i no se'n faci cap ús comercial ni obra derivada, tal com queda estipulat en la llicència d'ús Creative Commons
Language: Anglès.
Series: Working papers
Series: Working papers ; 528.02
Document: workingPaper
Subject: Accionistes

Adreça alternativa: https://hdl.handle.net/2072/1921


24 p, 236.0 KB

The record appears in these collections:
Research literature > Working papers

 Record created 2009-07-15, last modified 2019-02-02



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