Why Activist Hedge Funds Target Socially Responsible Firms, and How Executives and Investors Can Counteract Them
Increasingly powerful and influential, activist hedge funds are forces to be reckoned with. With their controversial tactics aimed at maximizing shareholder profit, they undermine sustainability practices, which they consider wasteful. Indeed, not only do they tend to suppress the corporate social responsibility (CSR) activities of the companies they target, they also target companies with stronger CSR records in the first place, as a new study reveals. But its authors Mark DesJardine, Rodolphe Durand, and Emilio Marti also show that these companies can divert the attention of activist hedge funds, and that policymakers and socially minded investors can intervene, too.
The Uncertainty Across Disciplines Project
We, individuals and society, are faced today with many important decisions involving radical degrees of uncertainty. To better communicate on the current state of knowledge about uncertainty, and incorporate it into decisions, Brian Hill, CNRS and HEC Paris Professor of Economics and Decision Sciences, initiated the Uncertainty Across Disciplines project.
Activist Hedge Funds: Good for Some, Bad for Others?
Do activist hedge funds help or harm the companies they target? Mark DesJardine of Pennsylvania State University’s Smeal College of Business and Rodolphe Durand of HEC Paris (members of the HEC’s Society & Organizations Institute) investigated the long-term effects of hedge fund activism on companies that get targeted by these activists. In their extensive research, they found the value of targeted companies spikes the first year after targeting but drops in later years relative to similar non-targeted companies. In addition, the authors found that being targeted by activist hedge funds put a halt to the broader investment portfolios and socially responsible efforts of companies.
Walking the Talk: Why Companies Should be Politically Transparent
More and more companies flaunt their policies regarding social or environmental sustainability. However, these same companies may promote policies that contradict their stated CSR objectives through their political actions. Enough is enough, says a group of top researchers (including Rodolphe Durand and Magali Delmas) arguing for political transparency in a paper that won the California Management Review’s Best Article Award 2019.
The Rise of Rankings in Global Governance: How Can They Change the Regulation of Large Corporations?
Ratings and rankings have become powerful tools in global governance, frequently used to motivate companies to be good corporate citizens. A wide range of environmental and social matters such as access to medicine, climate change, obesity and working conditions increasingly transcend national borders and escape the reach of national regulators. For such issues, who should set the rules about the responsibilities of corporations? How can corporations that are by definition designed to generate profit, be guided towards making decisions that benefit society as a whole? Afshin Mehrpouya and Rita Samiolo explore the process behind the production of these rankings.
Posing Dilemmas: an MBA Ethics Course Incites Students to Question Themselves and their Beliefs
Five years after its launch as a core course, Ethics and Sustainability is now one of the most successful courses in the HEC MBA program. Through a lively combination of debate, discussion, game playing, and surveys, see how this course leads students to question their own beliefs, gain an understanding of other points of view, and become better decision makers in the process.
Reinventing Business Education
Editorial by Marc Vanhuele, Professor of Marketing and Associate Dean. We live in a world of constant transformation. The role of research and education at a business school like HEC is to constantly innovate in order to give our students the knowledge, skills and mindset to live and work in a world with opportunities and challenges that may already have shifted by the time they graduate.
How storytelling can increase support for whistleblowers
Whistleblowers are often condemned by society, but they can be key to uncovering scandal. Hervé Stolowy, Luc Paugam and co-researchers Yves Gendron and Jodie Moll uncover how whistleblowers can tell their stories to better promote the positive aspects of their role for society and increase their legitimacy.
Does environmental proactivity pay?
For a firm to be profitable, does it need to listen to all its stakeholders? And what happens if a firm is sensitive to stakeholder demands and proactive about environmental issues? Bertrand Quelin’s latest research reveals a surprising correlation between these seemingly disparate business issues.