Shareholder Activism Research: A System-Level View

Shareholder activism is an important driver of corporate change. Yet, the phenomenon has primarily been studied within disciplinary silos, providing only a partial understanding of the overarching process, the actors involved, the engagement approaches used, and the tangible outcomes of activism. Noting these limitations, the purpose of this review is threefold. First, we present an integrated account of the current state of cross-disciplinary knowledge on shareholder activism to identify what we know about different aspects of activist–firm engagements. Second, we use that account to develop a detailed map of the shareholder activism process, including how activists identify target firms, the engagement approaches used, the role of stakeholders’ varied reactions, and outcomes of activism campaigns. Third, after mapping this process, we propose that the cumulative interdependencies identified by shareholder activism researchers can be more fully understood as a complex, dynamic, and adaptive system. This system accounts for activists’ interdependence on other stakeholders, dynamic feedback loops whereby current campaigns affect future engagements, and strategic adaptive behaviors by firms and stakeholders over time. We use our system-level view of activism to identify a roadmap for future research that can more fully unpack the implications of shareholder activism on organizational and societal outcomes.