Discussion of ‘Importing Activists: Determinants and Consequences of Increased Cross-border shareholder activism’

• Published in: Journal of accounting & economics 2022-11, Vol.74 (2-3), p.101540, Article 101540
• Main Author: Lowry, Michelle
• Format: Article
• Language: English
• ISSN: 0165-4101; 1879-1980
• DOI: 10.1016/j.jacceco.2022.101540

Maffett et al. (2022) [Importing Activists: Determinants and Consequences of Increased Cross-border shareholder activism. Journal of Accounting and Economics, forthcoming] find that regulations on shareholder engagement and board structure lead to increased shareholder activism. How generalizable is this conclusion: can we conclude more generally that shareholder empowering regulations contribute to increased shareholder engagement? I discuss three areas along which future research can increase our understanding of this bigger picture question. •It remains unclear whether corporate governance-related regulations facilitate or deter investor engagement. The relation depends on the type of regulations and the form of investor engagement, raising questions regarding the underlying economics.•It remains unclear whether there is an optimal level of shareholder-empowering regulations.•Shareholder-empowering regulations that facilitate shareholder activism contribute to lower investment. It remains unclear whether this reflects a decrease in agency costs or an increase in short-termism.