Does Shareholders Activism in Shareholders Meeting Benefit Them and Firms?

The huge increase of institutional share ownership - 6% in the 1950's compared to 70% nowadays in the USA - is mainly responsible for the growth of shareholders activism. These shareholders challenge companies on governance matters such as the composition of the Board of Directors, anti take-over measures..., vote against resolutions and propose their own resolutions. Due to regulatory developments and an almost obligation to vote, the big diversified funds are in fact very active shareholders, even when they practice passive investing. Hedge funds also act as activists but in a different way since they acquire substantial stakes in companies in order to change their governance and strategy. Recent research highlight that shareholders activism lead to better long-term performances and in the case of hedge funds, to changes in control, sometimes detrimental to others shareholders. The effects of activism on the other stakeholders are not still well-known.