Abstract
Shareholder activists play a key role in monitoring managerial behaviour. This study was undertaken given the paucity of research on the shareholder activism as practised by individual shareholders. Accordingly, the motives, modus operandi and sources of salience of Mr Theo Botha, a well-known shareholder activist in South Africa, were investigated. Document analysis and an in-depth interview conducted with Botha revealed that he not only has a clear goal, but is also very passionate about achieving his goal. Botha prepares meticulously before engaging companies across the economic spectrum. In addition to possessing normative power, Botha also exhibits individual, pragmatic and societal legitimacy. His assertiveness, persistence and willingness to apply his own resources significantly contribute to his prominence as a corporate watchdog. Shareholder activists who wish to become more salient (irrespective of their size) could learn from Botha’s experiences over the past decade.
Highlights
First they ignore you, they laugh at you, they fight you, you win.This quote by Mahatma Gandhi (1897-1948) aptly captures the essence of what many activists experience in their endeavours to bring about change.Shareholder activists are investors who use their equity stake in the companies in which they invest to ask questions and demand corporate accountability
With the phasing in of the second King report on good corporate governance (King II) in 2002, many South African companies were saying that they were adhering to King II ‘as if nothing had changed from King I’ (TB)
Botha is widely regarded as a corporate governance expert, he has questioned companies on a range of other socially relevant issues, thereby enhancing his level of social legitimacy
Summary
They laugh at you, they fight you, you win.This quote by Mahatma Gandhi (1897-1948) aptly captures the essence of what many activists experience in their endeavours to bring about change.Shareholder activists are investors who use their equity stake in the companies in which they invest (hereafter called investee companies) to ask questions and demand corporate accountability. They laugh at you, they fight you, you win This quote by Mahatma Gandhi (1897-1948) aptly captures the essence of what many activists experience in their endeavours to bring about change. Investors who seek to influence the nature of policies and practices of investee companies can employ different mechanisms to do so. They can engage in private discussions with management, file shareholder resolutions, ask questions and vote at annual general meetings (AGMs). They can initiate litigation, voice their concerns in the media or divest from companies that fail to transform (Nordén & Strand, 2011)
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