Shareholder Activism and Voluntary Disclosure

50 Pages Posted: 3 Oct 2015 Last revised: 17 Aug 2017

Thomas Bourveau

Hong Kong University of Science & Technology (HKUST)

Jordan Schoenfeld

University of Utah

Date Written: May 25, 2017


We examine the relation between shareholder activism and voluntary disclosure. An important consequence of voluntary disclosure is less adverse selection in the capital markets. One class of traders that finds less adverse selection unprofitable is activist investors who target mispriced firms whose valuations they can improve. Consistent with this idea, we find that managers issue earnings and sales forecasts more frequently when their firm is more at risk of attack by activist investors, and that these additional disclosures reduce the likelihood of becoming an activist's target. These additional disclosures also prompt a positive price reaction, contain more precise guidance, and exceed prevailing market expectations. These findings imply that managers use voluntary disclosure to preempt activism at their firm, and that activists prefer to target relatively opaque firms.

Keywords: Corporate Disclosure, Corporate Governance, Investor Relations, Shareholder Activism

JEL Classification: G10, G34, M41

Suggested Citation

Bourveau, Thomas and Schoenfeld, Jordan, Shareholder Activism and Voluntary Disclosure (May 25, 2017). Review of Accounting Studies, 2017, 22(3), 1307-1339. Available at SSRN: or

Thomas Bourveau

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon, 999999
Hong Kong

Jordan Schoenfeld (Contact Author)

University of Utah ( email )

1645 E. Campus Center
Salt Lake City, UT 84112
United States

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