ACCOUNTING CEO Gender and Responses to


Shareholder Activism Contemporary Accounting Research, 41, 3, Fall 2024


KRISTINA M. RENNEKAMP NAKASHIMATO PROFESSOR Samuel Curtis Johnson


Graduate School of Management


Cornell SC Johnson College of Business Cornell University


LINK TO PAPER LINK TO KRISTI RENNEKAMP VIDEO


Co-authors • Kristina M. Rennekamp Nakashimato Professor, Samuel Curtis Johnson


Graduate School of Management, Cornell SC Johnson College of Business, Cornell University


• Scott C. Jackson, Lee Business School, University of Nevada-Las Vegas • Blake A. Steenhoven, Smith School of Business, Queen’s University, Ontario


Summary Shareholder capitalism takes place when a shareholder attempts to use their


rights as a partial owner to bring about change within a company. Between 2017 and 2020, shareholder activists initiated over 2,800 campaigns world- wide, with 20% either successful or ending in settlement with the targeted company. Recent literature finds that firms led by female CEOs are more likely to be targeted by activist shareholders and that female CEOs are more likely to cooperate with activist shareholders’ requests. Tis study uses two controlled experiments and a series of semi-structured interviews with CEOs and CFOs to investigate how a CEO’s response to shareholder activism influences inves- tors’ reactions and whether these reactions differ depending on the gender of the CEO or on how their response is explained.


Te authors’ interviews with CEOs and CFOs provide insights into how the gender of firms’ leadership may play a role when activist shareholders target firms, collectively suggesting that investors rely on gender stereotypes when evaluating the responses of male and female executives to shareholder activ- ism and that these evaluations affect their investment judgments. Teir results also suggest a potential alternative explanation for the finding that female CEOs are more likely to cooperate with activist shareholders than are male CEOs. Rather than inherent differences in the management styles of male and female CEOs, responses to activist shareholders may be driven, at least in part, by managers anticipating that they will be penalized by investors for deviating from a norm.


CONTENTS TO MAIN


| RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2024 EDITION


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