Managerial Activism

Abstract

We examine managerial activism through collective action in the corporate sector. Activist managers spend considerable resources to pursue pro-business as well as pro-manager issues. While managerial activism is valuable in following pro-business strategies, pro-manager agendas may exacerbate agency problems. Our evidence supports the pro-business role of managerial activism. Firm performance improves with managerial activism through collective action, primarily in firms that are government dependent, have more intangible assets or operate in industries with low competition. Overall, managerial activism adds value to firms, especially when information dissemination is more essential due to firm characteristics.

Keywords: Corporate Governance, Managerial Activism, CEO Compensation, Firm Performance, Corporate Social Responsibility

JEL Classification: G14, G18, G34, G38, D7