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We examine expectation documents’ effectiveness as an activism tool. We use as a natural experiment, the unforeseen release by the Norwegian sovereign wealth fund of a corporate governance expectation document. We introduce a novel, three-way analytical decomposition of the firms, the fund, and their joint response to this document. Firms’ governance practices adapt to the fund’s new portfolio-wide governance preferences, with heterogeneous responses across ownership and firm characteristics. The fund’s investment polices also change, even at the expense of financial returns. Overall, our research demonstrates the potential effectiveness of expectation documents as an emerging low-cost activism tool for universal investors


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