State-Backed Shareholder Activism

Abstract

In the global quest for the improvement of institutional shareholder activism, an alternative approach has emerged and proliferated in East Asian jurisdictions: nonprofit organizations (NPOs) as activist investors. This Article examines the hitherto understudied case of China’s activist NPOs, in particular, the China Securities Investor Services Center (ISC). It examines the ISC’s wide array of activism and engagement activities and tactics, including China’s first opt-out securities class action, derivative action, public campaigns, naming and shaming, and behind-the-scene engagements. The research further shows that the ISC represents a new form of NPO activism: state-backed shareholder activism.

Keywords: Shareholder Activism; China