Shareholder Strategies, Beyond CSR

The power of shareholders to influence corporate strategy is increasingly evident, especially with the emergence of new approaches such as impact investing by investment funds and the activism of many shareholders, who typically seek to push companies toward sustainable behaviors.

However, a comprehensive view of the role of different types of shareholders and their impact on corporate strategies is often lacking. "It is true that with great power comes great responsibility, but the power of shareholders goes beyond the ability to intervene in corporate governance," clarifies Mario Daniele Amore, Full Professor at Bocconi's Department of Management and Technology. He is co-organizer of the third edition of Owners as Strategists (OAS 2023), an online conference organized by Bocconi and the University of St. Gallen and supported by the AIDAF-EY Chair in Strategic Management of Family Businesses in memory of Alberto Falck, to be held online on June 27 (CLICK HERE to register). "States, private equity funds, venture capital funds and owning families are all examples of shareholders with different objectives that profoundly affect corporate strategy."

"The topic calls for an in-depth examination of the firm's objectives and its role in society, says Paola Taricco, another co-organizer from the Bocconi side. "The fundamental question raised by scholars such as Luigi Zingales, who will open the event with his keynote speech, is 'what should a company maximize?' The classic answer, 'shareholder value,' is often considered no longer sufficient."

The concept of a company's objective function is crucial in this context. According to a broad view, companies should pursue the goals of their owners, but the reality is more complex. There are different preferences among shareholders, which means they may have different goals. In addition, until recently only managers were considered able to develop business strategy, with the classic "agency problem," which arises when there is a mismatch between the goals of the owners and the goals of those who run the company.

"The increasing concentration of corporate ownership in the hands of venture capitalists, private equity firms, hedge funds and similar entities raises the question of their influence on corporate strategy. These owners have their own objectives e.g. regarding investment horizon or asset concentration. To date, there is little research on these topics, and we need to learn more about the underlying motives and mechanisms," says Thomas Zellweger, co-organizer of the conference, along with Christine Scheef, for the University of St. Gallen.

In addition to the opening speech by Zingales and the closing speech by Ed Zajac (Kellogg School of Management), the conference will include an international panel discussion on The responsibility of owners in today's economy, in which Peter Klein (Baylor University), Steen Thomsen (Copenhagen Business School), and Yupana Wiwattanakantang (National University of Singapore) will participate, as well as a series of academic paper presentations.