Title: Does shareholder activism improve operating performance of targeted companies: a re-examination of CalPERS' focus list program

Authors: Steven X. Zheng; Ke Zhong

Addresses: Department of Accounting and Finance Asper School of Business, University of Manitoba, 181 Freedman Crescent, Winnipeg, MB R3T 5V4, Canada ' Department of Accounting, College of Business, Central Washington University-Lynnwood, 20022 68th Ave. West, Lynnwood, WA 98036, USA

Abstract: This paper examines the effectiveness of California public employees' retirement system (CalPERS)' activism on improving operating performance of companies targeted by its Focus List program over the 1992-2009 period. We find that operating performance of the Focus List firms, through various measures, improved significantly over the 2 years subsequent to being targeted by CalPERS. The empirical evidence suggests that CalPERS' activism is more effective in improving the targeted firms' operating performance than previously recognised in the literature.

Keywords: CalPERS focus list; corporate governance; operating cash flows; operating efficiency; operating performance; operating profit margin; return on assets; shareholder activism.

DOI: 10.1504/IJCG.2017.087367

International Journal of Corporate Governance, 2017 Vol.8 No.2, pp.156 - 173

Received: 30 Jun 2016
Accepted: 16 Jun 2017
Published online: 13 Oct 2017 *

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