Management Practices in an Age of Engaged Investors

What is an Engaged Investor?
An Engaged Investor is a type of investor that plays an important role in capital markets by searching for opportunities to create value in publicly listed companies. They frequently pursue governance strategies to motivate corporations to act in accord with their own conclusions.

Why this line of research?
Interest in the actions of engaged investors has been growing for some time. Some say they provide a valuable role in policing poor corporate governance. Others argue they create short term thinking and interfere with long term strategies and investment with long term paybacks. There is some truth to both viewpoints. The objective of this project is to create practical reference material that can be applied by business leaders to address engaged investors issues and actions with the goal to create the best outcome for all shareholders.

2016 – 2017 Engaged Investor research roadmap:
In consultation with CGE, Columbia University’s Richman Center leadership will define and lead the research needed to support this effort. The intent of the project is to base these strategies and recommendations on research from actual business experiences.

Project plan:
• Identify engaged investor motivations and behaviors.
• Identify actions corporations can take to address these issues internally.
• Recommend actions that corporations should take once they have been approached by engaged owners of their shares.
• Develop a guidebook that examines how a company should respond to an investors’ challenge. The research outlined in the guidebook will be the basis of the “best practices” paper or papers proposing how a company should react to enhance both their long term interests and the interests of the investor.

Project Partner:

  • Columbia University/Richard Paul Richman Center
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