Special Issue - Investor Influence on Company Management

Citation

(2006), "Special Issue - Investor Influence on Company Management", Management Decision, Vol. 44 No. 8. https://doi.org/10.1108/md.2006.00144haa.002

Special Issue - Investor Influence on Company Management

Management Decision is inviting contributions of 3,000 - 6,000 words by October 1, 2006 for consideration in a special issue on Investor Influence on Company Management.

Guest Editors:

Dr Tahir M Nisar Southampton School of Management, UK and Professor Roderick Martin, Central European University Business School, Hungary

Theme

Recent academic research and press reports suggest that investor activism is alive and well in the UK and US, both in the form of shareholder activism and in the more direct and active form of venture capital fund engagement. There are significant returns to investor activism, particularly when investors have considerable expertise in the areas in which they are investing. Investors are not simply the passive principals on whose behalf managers, as agents, act. As universal owners, for example, large institutional investors, especially pension funds, have an interest in the overall contribution of the firm to the national economy, not only in its immediate stock market valuation.

The extent to which investors engage with the firms in which they invest differs between types of investors and between firms. Private equity funds and venture capital firms have a different mode of engagement from institutional investors, with venture capital firms often adopting a proactive approach to the early stages of firm development. For institutional investors a particular concern is the appropriate level of collaboration amongst investors concerned about the performance of a firm. Independent investor action may give rise to ‘free rider’ problems, with inactive investors benefiting from the engagement of others. Investors are likely to target a diverse set of management practice areas. These may include topics traditionally considered as matters of concern to investors, such as recruitment (and firing) of management teams, corporate restructuring, mergers and acquisitions, executive compensation and the role of share options. Issues such as innovation and the role of skills development have also attracted recent interest. In addition, there has been increasing emphasis on common international standards in corporate governance, in accounting practice and in good business practice. The extent to which national business systems have adopted common international standards and practices differs, with Continental Europe including Germany remaining significantly different from the UK and US. Through this special issue we hope to encourage research that takes further some of these ideas. Possible questions include, but are not limited to:

• •

  What are the methods used by investors to engage with the managers? Where do investor networks come from, and how do they affect portfolio company performance?

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  What are the different aspects of management practice that investors might be expected to seek to influence?

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  Are there tensions or conflicts between investors and their portfolio companies? How can such tensions or conflicts be effectively managed?

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  Is there any evidence for the convergence of investor-manager relations on the model of Anglo-Saxon shareholder value philosophies? The discussion can focus on comparison between the UK and the US or between these and Continental Europe.

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  What are the policy implications of regulatory regimes for investor engagement, both within the context of venture capital industry and institutional investors, more broadly

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  What are the motivations of different types of investors to engage with the companies in which they invest? The discussion can touch on all the major types of investors (public pension funds, private pension funds, unit trusts/mutual funds, insurance companies, banks and private equity funds). Papers on private equity funds and pension funds, as two types of investors with a relatively high propensity to engage, are particularly encouraged.

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  How does investor engagement influence portfolio company decision making? What are the factors that enable investor engagement?

Submissions

The goals of this special issue are

1. 1.

   to encourage scholars to examine the process of investor influence on company management through novel theoretical lenses, including critical approaches to the topic, and

2. 2.

   to carry out empirical inquiry from different perspectives. Empirical papers can use research methods such as case studies or more formal investigative approaches using cross-section or panel data.

We also encourage submissions by industry experts using case studies of venture capital funds and their portfolio companies, comparing their strategy and performance, general management issues or corporate governance. They can also express opinions on the behaviour of institutional investors within the general context of stakeholder value and company performance. These submissions will not be peerreviewed, and will be included in a separate opinion section.

All contributions must conform to the standard Management Decision guidelines available on the Emerald website. http://www.emeraldinsight.com/info/journals/md/notes.htm

To be considered for publication in this special issue, manuscripts must be received by October 1, 2006. Contributions of no more than 6,000 words should be submitted directly to the Guest Editors, Tahir Nisar and Roderick Martin at T.M.Nisar@soton.ac.uk and MartinR@ceubusiness.com