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.
4 Lessons from Bringing Design Thinking into a Business
Design thinking has been hailed as the latest strategy to gain a powerful competitive edge in both innovation and processes. But to be successful, it must involve a major cultural and organizational shift. Two researchers and Thales Chief Design Officer share the lessons from their analysis of bringing design thinking to technology giant Thales.
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.
The Key to Involving the Private Sector More in Public-Private Partnerships
In a context of tightening of public purse strings, governments increasingly rely on public-private partnerships (PPP) to design, build, finance, maintain and operate infrastructures and services, were once purely state managed. This includes traditional infrastructures, such as bridges and roads, and services, such as schools and hospitals. Researchers have found that the key factor in attracting strong private partners to build efficient PPPs is the quality of national institutions.
Understanding and Improving e-Government Website Usage
Administrations invest significant time and money into the development of e-government websites. Ultimately, the reward is cost savings and greater efficiency for governments, but this depends on the public’s initial adoption and continued use of the sites. A new research paper investigates the factors that influence people’s usage of e-government sites and offers tips to improve service quality.
How Scandal Helps Punish Powerful Corporate Criminals
Could scandals actually be good for society? Often brushed aside as simply media hype or gossip, new research shows that scandals can be potent opportunities for regulatory authorities to challenge individuals or corporations that are otherwise untouchable because of their high status.
Why Former Soldiers Could Make More Trustworthy CEOs
Damaging cases of financial fraud often directly involve company CEOs. Are CEOs with a past in the military less likely to commit fraud? Or are they just better at not getting caught red-handed? New research by Georg Wernicke (HEC Paris) and Irmela Fritzi Koch-Bayram (University of Mannheim) sheds light on that question.
CEO Pay and Philanthropy: When good intentions attract bad attention
In giving large compensation to CEOs, some companies receive criticism in the media, while others escape attention. Recent research shows that the companies under the most scrutiny are often those who engage in activities that media and other stakeholders perceive as contradictory, such as CEO overcompensation and corporate philanthropy.