Eddy Wymeersch

Shareholders in Action

WP 2007-03

Recently a new category of shareholders is manifesting itself: as activist shareholders they intervene in the actual running of the company, dictating its governance, determining its strategies, and often taking a very aggressive attitude against the incumbent management. Their action is severely criticized by the politicians or in the media, as being destructive of the firms, of enterprise values or of employment. The paper aims at describing the features of the activist shareholders, comparing them to their elderly brothers, the institutional investors, concluding that more disclosure should be available about them, while suggesting that in case they effectively take control of the company, a remedy similar to the mandatory bid may be considered.