This paper examines active ownership in Japan by an equity ownership service, Governance for Owners Japan (GOJ). GOJ engages with portfolio companies on behalf of Japanese and international institutional investors. The engagements are exclusively private and are not observable to the public.
We use the stated objectives of the interventions to measure the incidence of success, and the stock market response to the public announcement of engagement outcomes. We find a high rate of success and average cumulative abnormal returns (CARs) of about 2.6 percent between -5 and +5 of an event date in response to outcome announcements. Since there is more than one outcome per engagement, the average CARs per engagement is 6.5 percent. Target companies were more likely to adopt recommendations proposed in GOJ’s private engagements than in a sample of public activist engagements over a similar time period.
Using natural language processing, we identify and categorize the corporate goals in the shareholder letters of the 150 largest companies in the United...
A common argument against divestment is that it jettisons voting power and that it has a small effect on stock prices. We argue that divestment is a form of...