Management Science· 2026Q1
Collective Activism
- 1citations
- Q1SCImago
- 2026year
Short summary
Investor Collective Action Organizations (ICAOs) can satisfy stewardship codes by coordinating activism, but their formation and size are sensitive to coordination costs and free-rider issues.
AI-generated from the title and abstract; the full text is not read.
Key points
- ICAOs enable coordinated investor activism to satisfy stewardship codes.
- ICAOs overcome internal free-rider problems but can exacerbate external ones.
- The benefit of ICAO membership is hump-shaped in size.
- Multiple equilibria for ICAO formation exist with moderate coordination costs.
- Small changes in coordination costs critically affect ICAO formation and activism.
AI-generated from the title and abstract; the full text is not read.
Abstract
Can investor stewardship codes that call for coordinated activism be satisfied by an Investor Collective Action Organization (ICAO)? In an ICAO, investors work collectively, like a large shareholder, to monitor management and increase value. We analyze the endogenous formation of an ICAO and its equilibrium size, considering free-rider problems and coordination costs. While the ICAO overcomes free-rider problems among its members, it exacerbates them between the ICAO and solo activists. The benefit of joining an ICAO is hump-shaped in size. With moderate coordination costs, ICAO formation features multiple equilibria. Small changes in coordination costs significantly influence ICAO formation and activism. This paper was accepted by Will Cong, finance. Funding: L. Yang thanks the support from the Social Sciences and Humanities Research Council of Canada [Grants 435-2021-0040, 435-2026-0060] and the Bank of Canada [Fellowship]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2025.02975 .
The authors' abstract, as published at the source. Management Science, 2026 · DOI ↗
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