My latest paper, Shareholder Activism: A Board-Centric Critique (July 1, 2013), has been posted to SSRN: http://ssrn.com/abstract=2288191. The abstract is as follows:
This is a draft chapter for a forthcoming research handbook on shareholder power and activism. This chapter provides a perspective on shareholder activism based on my director primacy model, which argues that for a board-centric approach to corporate governance, rather than a shareholder-centric one, as both a normative and descriptive matter.
Institutional investor activism has not – and cannot – prove a panacea for the pathologies of corporate governance. Activist investors pursue agendas not shared by and often in conflict with those of passive investors. Activism by investors undermines the role of the board of directors as a central decision-making body, thereby making corporate governance less effective. Finally, relying on activist institutional investors will not solve the principal-agent problem inherent in corporate governance but rather will merely shift the locus of that problem.