Successful private investor activism in an emerging market
Purpose: Institutional investors in emerging markets are increasingly under pressure to integrate environmental, social and corporate governance considerations into their investment analyses and ownership practices. Old Mutual Investment Group (OMIG) is a South African-based institutional investor that has long been regarded as a pioneer in responsible investing. The purpose of this study was to examine the nature and effectiveness of OMIG's private shareholder activism endeavours over the period 1 January 2014 to 30 June 2018. Design/methodology/approach: A unique database was constructed using proprietary, point-in-time data for 69 listed companies covering 283 private engagements. Binary logistic regressions were conducted to test the hypothesised relationships. Findings: The majority of the private engagements centred on executive remuneration. This finding was not unexpected given the large and growing wage gap in South Africa. Close to two-thirds of OMIG’s private deliberations were successful. Engagement success was positively associated with a targeted company’s capacity to change and desire to protect its reputation. Research limitations/implications: This study only investigated the private shareholder engagement actions of a single, well-resourced institutional investor. Practical implications: The findings serve as an encouragement to other investors who are contemplating a more active approach to change unethical and unsustainable corporate policies and practices. Originality/value: This unique analysis sheds light on the determinants and success of private shareholder activism in an emerging market.
Year of publication: |
2020
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Authors: | Viviers, Suzette ; Mans-Kemp, Nadia |
Published in: |
Corporate Governance: The International Journal of Business in Society. - Emerald, ISSN 1472-0701, ZDB-ID 2108826-3. - Vol. 21.2020, 1 (05.11.), p. 92-110
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Publisher: |
Emerald |
Saved in:
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