The financial crisis has intensified the ongoing debate about the role that
shareholders should play in corporate governance. To some, increasing shareholder
power and facilitating shareholder intervention when necessary is part of the
necessary reforms. To others, activism by shareholders who potentially have shortterm
interests is part of the problem, not a solution. To what extent (and when) can
shareholder activism improve firm value and performance? To what extent (and
when) can shareholder activism produce distortions that make matters worse?
Research by financial economists that seeks further light on these questions will
provide valuable input to the questions with which decision-makers are wrestling.