The first theme of my research is the effectiveness of direct monitoring by shareholders in solving the agency problems that arise from the separation of ownership and control. Until recently, purchasing a large ownership stake seemed to be the only way to influence management, whether through quiet diplomacy (e.g., concentrated institutional ownership) or through more openly confrontational means (e.g., proxy fights, hedge fund activism). Short of acquiring a significant stake, which is a strategy that is usually not feasible for highly diversified investors (e.g., public pension funds, union pension funds) and is often prohibitively costly at large firms, shareholders did not seem to have effective monitoring tools. That is, shareholder initiated proposals and votes were ineffective.
The first theme is the impact of direct monitoring by shareholders on the governance structures of public firms. In particular, I focus on the effectiveness of shareholder activism in solving the governance problems that arise from the separation of ownership and control. The second theme is the production and disclosure of information by firms and information intermediaries (specifically, financial analysts), and the effects of those activities on firms' information environments.