1. Give definition of activist investor and talk about pros and cons
Shareholder activism, also known as assignholder encounter or share ownership, occurs when shareholders use their ownership rights to monitor and charm how their portfolio companies manage ESG issues.
Sullivan and Mackenzie (2006) categorize the activism strategies as (i) dialogue or engagement, in which companies couple with investor to discuss the firms strategy, how the firm plans to meet its objectives, issues related to CSR and corporate governance, and so on; (ii) the use of suffrage and other formal rights, including attending annual ecumenic meetings to contend questions, proposing shareholder resolutions, exercising voting rights and calling extraordinary general meetings; (iii) collaboration with other investors through formal coalitions in which investors have a unified voice; (iv) benchmarking, to compare company cognitive process on different ESG issues and encourage companies to improve their performance; (v) media communications to allow investors to communicate their views to company directors and their advisors; and (vi) the ability to influence share price through the buying and selling of shares, as the affright of takeover is recognised as important to focus the warinesss attention to shareholder value.
Potential advantages of activist investor:
* prop Feet to the Fire Because they often purchase, or have the ability to purchase, (or short) crowing quantities of stock, activist shareholders are powerful. They may also have a stated desire to replace the existing board. As a result, management and the board may be more result to work with an activist. In addition, activist firms tend to garner a fair amount of press and often have a podium to air their grievances.
* sensitive Faces May Mean New Ideas Clearly not every activist firm will bring fresh ideas to the table. However, those that do establish a braggy position over...If you want to get a full essay, give it on our website: Ordercustompaper.com
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