Corporate boards at the edge of chaos: shareholder activism from a complexity theory lens

Kyritsis, Thomas (2020) Corporate boards at the edge of chaos: shareholder activism from a complexity theory lens. Doctoral thesis, University of West London.

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Kyritsis - PhD Thesis (Dec 20).pdf - Accepted Version

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The increasing influence of offensive shareholder activism driven by hedge funds has become a significant issue for corporate boards. The intervention of shareholder activists often challenges current strategies and the status quo of the corporate governance of publicly listed companies.
Previous studies have utilised agency theory as a lens to explore and explain corporate governance issues. However, these studies have been unable to capture the complexity and the dynamics of Board interactions and provide a comprehensive view of the impact of shareholder activism. This thesis adopts complexity theory as an exploratory framework that views a Board as a complex co-evolving system and examines holistically its multiple interactions with shareholder activists and other stakeholders that together create the company’s social ecosystem.
A multi-case study approach was chosen with three international hotel companies selected for analysis. The latter had all undergone one or more attacks from shareholder activists over the same period. Online documentary information was collected and used to construct three case studies. Template analysis was chosen as a tool to analyse the selected cases. A template framework was developed based on complexity concepts, principles and language to evaluate the impact of shareholder activism.
The findings reveal that offensive shareholder activism influences the decision-making processes of the Boards of Directors. Macro-environmental conditions, a company’s vulnerabilities, shareholder activists’ attacks, Boards defence mechanisms and changes in a target company emerged from the analysis of the three cases. The thesis identified enabling conditions that facilitate effective corporate governance at a company level and collectively comprise an ‘enabling environment’.
The main contribution of this study is the creation of an integrated model of shareholder activism that offers a chronological overview of the impact of shareholder activism and provides insights into the interactions of Boards with shareholder activists and other stakeholders. This model can be employed by researchers as a tool for analysing social dynamic phenomena and by practitioners to develop efficient and robust defence mechanisms for Boards and companies.

Item Type: Thesis (Doctoral)
Subjects: Business and finance > Business and management > Corporate governance
Depositing User: Thomas Kyritsis
Date Deposited: 01 Apr 2021 22:35
Last Modified: 28 Aug 2021 07:15


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