“Dear CEO and Board”: How Activist Investors’ Confidence in Tone Influences Campaign Success
Published Online:13 Sep 2022https://doi.org/10.1287/orsc.2022.1625
References
- Activist Insight (2020) The Activist Investing annual review 2020. Accessed June 14, 2021, https://www.activistinsight.com/research/theactivistinvesting_annualreview_2020.pdf.Google Scholar
- (2021) Activist hedge funds: Beware the new titans. Acad. Management Perspective 35(1):96–122.Crossref, Google Scholar
- (2016) Managers set the tone: Equity incentives and the tone of earnings press releases. J. Banking Finance 72:132–147.Crossref, Google Scholar
- (2016) The product market effects of hedge fund activism. J. Financial Econom. 119(1):226–248.Crossref, Google Scholar
- (2020) Hedge fund activism: Updated tables and figures. Accessed June 14, 2021, https://faculty.fuqua.duke.edu/˜brav/HFactivism_March_2019.pdf.Google Scholar
- (2019) Index funds and the future of corporate governance: Theory, evidence, and policy. Columbia Law Rev. 119:2029–2146.Google Scholar
- (2015) The long-term effects of hedge fund activism. Columbia Law Rev. (115):1085–1156.Google Scholar
- (2020) Dancing with activists. J. Financial Econom. 137:1–41.Crossref, Google Scholar
- (2017) Returns to hedge fund activism: An international study. Rev. Financial Stud. 30(9):2933–2971.Crossref, Google Scholar
- (2009) Returns to shareholder activism: Evidence from a clinical study of the Hermes UK Focus Fund. Rev. Financial Stud. 22(8):3093–3129.Crossref, Google Scholar
- (2014) Banks find niche helping firms defend against activists. Accessed June 14, 2021, https://www.wsj.com/articles/banks-find-niche-helping-firms-defend-against-activists-1418863844.Google Scholar
- (2017) The decline of social entrenchment: Social network cohesion and board responsiveness to shareholder activism. Organ. Sci. 28(2):262–282.Link, Google Scholar
- (2016) Impression management in organizations: Critical questions, answers, and areas for future research. Annu. Rev. Organ. Psych. Organ. Behav. 3(1):377–406.Crossref, Google Scholar
- (2008) A multi-level review of impression management motives and behaviors. J. Management 34(6):1080–1109.Crossref, Google Scholar
- (2011) Corporate governance and hedge fund activism. Rev. Derivative Res. 14(2):169–204.Crossref, Google Scholar
- (2000) The perceived validity of eyewitness identification testimony: A test of the five Biggers criteria. Law Human Behav. 24(5):581–594.Crossref, Google Scholar
- (2010) Hedge fund activism: A review. Foundations Trends Finance 4(3):1–66.Google Scholar
- (2015) Recent advances in research on hedge fund activism: Value creation and identification. Annu. Rev. Financial Econom. 7(1):579–595.Crossref, Google Scholar
- (2008) Hedge fund activism, corporate governance, and firm performance. J. Finance 63(4):1729–1775.Crossref, Google Scholar
- (2007) Sticks and stones: Language, face, and online dispute resolution. Acad. Management J. 50(1):85–99.Crossref, Google Scholar
- (2002) Effects of testimonial inconsistencies and eyewitness confidence on mock-juror judgments. Law Human Behav. 26(3):353–364.Crossref, Google Scholar
- (2016) Confidence—More a personality or ability trait? It depends on how it is measured: A comparison of young and older adults. Frontiers Psych. 7:518.Google Scholar
- (2017) Foreshadowing as impression management: Illuminating the path for security analysts. Strategic Management J. 38(12):2486–2507.Crossref, Google Scholar
- (2022) Omitted variable bias: Examining management research with the impact threshold of a confounding variable (ITCV). J. Management 48(1):17–48.Crossref, Google Scholar
- (2007) Is the magic still there? The use of the Heckman two-step correction for selection bias in criminology. J. Quant. Criminology 23(2):151–178.Crossref, Google Scholar
- Cambridge Dictionary (2020) Confidence. Accessed June 14, 2021, https://dictionary.cambridge.org/dictionary/english/confidence.Google Scholar
- (2018) Divided we fall. Organ. Res. Methods 23(2):211–237.Crossref, Google Scholar
- (2016) Sample selection bias and Heckman models in strategic management research. Strategic Management J. 37(13):2639–2657.Crossref, Google Scholar
- (2016) Global diversification discount and its discontents: A bit of self-selection makes a world of difference. Strategic Management J. 37(11):2254–2274.Crossref, Google Scholar
- (2018) Activist-impelled divestitures and shareholder value. Strategic Management J. 39(10):2726–2744.Crossref, Google Scholar
- (2002) Personality, peer relations, and self-confidence as predictors of happiness and loneliness. J. Adolescence 25(3):327–339.Crossref, Google Scholar
- (2016) The grammar of decoupling: A cognitive-linguistic perspective on firms’ sustainability claims and stakeholders’ interpretation. Acad. Management J. 59(2):705–729.Crossref, Google Scholar
- (1988) Juror decision making in eyewitness identification cases. Law Human Behav. 12(1):41–55.Crossref, Google Scholar
- (1993) Estimation and Inference in Econometrics (Oxford University Press, New York).Google Scholar
- (2012) Managers’ use of language across alternative disclosure outlets: Earnings press releases vs. MD&A. Contemporary Accounting Res. 29(3):804–837.Crossref, Google Scholar
- (2019) Language choice matters: When profanity affects how people are judged. J. Language Soc. Psych. 38(1):126–141.Crossref, Google Scholar
- (2017) Thirty years of shareholder activism: A survey of empirical research. J. Corporate Finance 44:405–424.Crossref, Google Scholar
- (2020) Disentangling the effects of hedge fund activism on firm financial and social performance. Strategic Management J. 41(6):1054–1082.Crossref, Google Scholar
- (2021) Why activist hedge funds target socially responsible firms: The reaction costs of signaling corporate social responsibility. Acad. Management J. 64(3):851–872.Crossref, Google Scholar
- (2019) What makes the difference? Employee social media brand engagement. J. Bus. Industry Marketing 34(7):1459–1467.Crossref, Google Scholar
- (2016) Through the mud or in the boardroom: Examining activist types and their strategies in targeting firms for social change. Strategic Management J. 37(12):2425–2440.Crossref, Google Scholar
- (2019) Reluctant disclosure and transparency: Evidence from environmental disclosures. Organ. Sci. 30(6):1207–1231.Link, Google Scholar
- (2010) The CoNLL-2010 shared task: Learning to detect hedges and their scope in natural language text. Proc. 14th Conf. on Comput. Natural Language Learn.: Shared Task (Association for Computational Linguistics, Stroudsburg, PA), 1–12.Google Scholar
- (1991) Personnel/human resources management: A political influence perspective. J. Management 17(2):447–488.Google Scholar
- (2000) Impact of a confounding variable on a regression coefficient. Sociol. Methods Res. 29(2):147–194.Crossref, Google Scholar
- (2015) Motivated to acquire? The impact of CEO regulatory focus on firm acquisitions. Acad. Management J. 58(4):1261–1282.Crossref, Google Scholar
- (2013) The costs of shareholder activism: Evidence from a sequential decision model. J. Financial Econom. 107(3):610–631.Crossref, Google Scholar
- (1988) Impression management in organizations. J. Management 14(2):321–338.Google Scholar
- (1959) The Presentation of Self in Everyday Life (Doubleday, Garden City, NY).Google Scholar
- (2014) Shareholder activism: A multidisciplinary review. J. Management 40(5):1230–1268.Crossref, Google Scholar
- (2011) What’s all that (strategic) noise? Anticipatory impression management in CEO succession. Strategic Management J. 32(7):748–770.Crossref, Google Scholar
- (2016) Ready, AIM, acquire: Impression offsetting and acquisitions. Acad. Management J. 59(1):232–252.Crossref, Google Scholar
- (2009) Investor activism and takeovers. J. Financial Econom. 92(3):362–375.Crossref, Google Scholar
- (2020) Rivals’ negative earnings surprises, language signals, and firms’ competitive actions. Acad. Management J. 63(3):637–659.Crossref, Google Scholar
- (2021) The impact of executive verbal communication on the convergence of investors’ opinions. Acad. Management J. 64(6):1763–1792.Crossref, Google Scholar
- (2018) Saving face: How exit in response to negative press and star analyst downgrades reflects reputation maintenance by directors. Acad. Management J. 61:1131–1157.Crossref, Google Scholar
- (2016) Mind the gap: The interplay between external and internal actions in the case of corporate social responsibility. Strategic Management J. 37(13):2569–2588.Crossref, Google Scholar
- (2017) Pseudo-Precision? Precise forecasts and impression management in managerial earnings forecasts. Acad. Management J. 60(3):1094–1116.Crossref, Google Scholar
- (1979) Sample selection bias as a specification error. Econometrica 47(1):153.Crossref, Google Scholar
- (2007) The use of logit and probit models in strategic management research: Critical issues. Strategic Management J. 28(4):331–343.Crossref, Google Scholar
- (1989) A Natural History of Negation (University of Chicago Press, Chicago).Google Scholar
- (2014) Tone management. Accounting Rev. 89(3):1083–1113.Crossref, Google Scholar
- (2014) SC 13D Filing by Carl C Icahn. Accessed June 14, 2021, https://www.sec.gov/Archives/edgar/data/34408/000092846414000063/fdosch13damd10619ex1.htm.Google Scholar
- (1979) Entropy measure of diversification and corporate growth. J. Industry Econom. 27(4):359–369.Crossref, Google Scholar
- (2017) Language and personality. Accessed June 14, 2021, https://wordwatchers.wordpress.com/tag/clout/.Google Scholar
- (1994) Political influence behavior and career success. J. Management 20(1):43–65.Google Scholar
- (2014) Pronoun use reflects standings in social hierarchies. J. Language Soc. Psych. 33(2):125–143.Crossref, Google Scholar
- (2008) Cognition, capabilities, and incentives: Assessing firm response to the fiber-optic revolution. Acad. Management J. 51(4):672–695.Crossref, Google Scholar
- (2009) Entrepreneurial shareholder activism: Hedge funds and other private investors. J. Finance 64(1):187–229.Crossref, Google Scholar
- (2018) Silver bullet or ricochet? CEOs’ use of metaphorical communication and infomediaries’ evaluations. Acad. Management J. 61(4):1196–1230.Crossref, Google Scholar
- (2016) The second wave of hedge fund activism: The importance of reputation, clout, and expertise. J. Corporate Finance 40:296–314.Crossref, Google Scholar
- (1970) Linguistics and natural logic. Synthese 22(1-2):151–271.Crossref, Google Scholar
- Lazard (2020) 2019 Annual review of shareholder activism. Accessed June 14, 2021, https://www.lazard.com/media/451141/lazards-2019-review-of-shareholder-activism-vf.pdf.Google Scholar
- (1990) Impression management: A literature review and two-component model. Psych. Bull. 107(1):34–47.Crossref, Google Scholar
- (2018) What makes a decision strategic? Strategy Sci. 3(4):558–573.Link, Google Scholar
- (2012) Selection models in accounting research. Accounting Rev. 87(2):589–616.Crossref, Google Scholar
- (1989) Mock-juror belief of accurate and inaccurate eyewitnesses: A replication and extension. Law Human Behav. 13(3):333–339.Crossref, Google Scholar
- (1971) Confidence, overconfidence and persuasion. Human Relations 24(5):359–369.Crossref, Google Scholar
- (2016) Textual analysis in accounting and finance: A survey. J. Accounting Res. 54(4):1187–1230.Crossref, Google Scholar
- (2013) Keeping up appearances. Admin. Sci. Quart. 58(3):387–419.Crossref, Google Scholar
- (2022) Activist investor disclosures and firms’ information environments. Preprint, submitted July 18, https://dx.doi.org/10.2139/ssrn.3137216Google Scholar
- (2019) Best practices for estimating, interpreting, and presenting nonlinear interaction effects. Sociol. Sci. 6:81–117.Crossref, Google Scholar
- (2019) Setting the pace: Examining cognitive processing in MOOC discussion forums with automatic text analysis. Interactive Learn. Environment 27(5-6):655–669.Crossref, Google Scholar
- (2021) Exploring the relationship between clout and cognitive processing in MOOC discussion forums. British J. Edu. Tech. 52(1):482–497.Crossref, Google Scholar
- (2011) Natural language processing: An introduction. J. Amer. Medical Inform. Assoc. 18(5):544–551.Crossref, Google Scholar
- (1998) Knowing theyself and others: Progress in metacognitive social psychology. Yzerbyt V, Lories G, Dardenne B, eds. Metacognition. Cognitive and Social Dimensions (Sage Publications, London), 69–89.Crossref, Google Scholar
- (2016) Vertical peer supervision of consultation: A linguistic exploration of relational hierarchy. Clinical Supervisor 35(2):287–304.Crossref, Google Scholar
- (1999) How we know—and sometimes misjudge—what others know: Imputing one’s own knowledge to others. Psych. Bull. 125(6):737–759.Crossref, Google Scholar
- (2018) Give it to us straight (most of the time): Top managers’ use of concrete language and its effect on investor reactions. Strategic Management J. 39(8):2204–2225.Crossref, Google Scholar
- (1996) Econometric methods for fractional response variables with an application to 401(k) plan participation rates. J. Appl. Econometrics 11(6):619–632.Crossref, Google Scholar
- (1999) Linguistic styles: language use as an individual difference. J. Personality Soc. Psych. 77(6):1296–1312.Crossref, Google Scholar
- (2015a) Linguistic inquiry and word count: LIWC2015 [computer software] (Pennebaker conglomerates ( www.LIWC.net), Austin, TX).Google Scholar
- (2015b) Linguistic inquiry and word count: LIWC2015. The development and psychometric properties of LIWC2015. Accessed June 14, 2021, https://repositories.lib.utexas.edu/bitstream/handle/2152/31333/LIWC2015_LanguageManual.pdf.Google Scholar
- (2015c) Linguistic inquiry and word count: LIWC2015. Operator’s manual. Accessed June 14, 2021, https://liwc.wpengine.com/wp-content/uploads/2015/11/LIWC2015_OperatorManual.pdf.Google Scholar
- (2021) Activist investors’ mild letter to GSK won’t stir up any rebellion. Accessed September 14, 2021, https://www.theguardian.com/business/nils-pratley-on-finance/2021/jul/01/nissan-hasnt-put-uk-ahead-in-electric-race-its-just-got-it-off-the-starting-grid.Google Scholar
- (2004) Intuitive evaluation of likelihood judgment producers: Evidence for a confidence heuristic. J. Behav. Decision Making 17(1):39–57.Crossref, Google Scholar
- PricewaterhouseCoopers (2020) How might the changing face of shareholder activism affect your company? Accessed June 14, 2021, https://www.pwc.com/us/en/governance-insights-center/publications/assets/pwc-how-might-the-changing-face-of-shareholder-activism-impact-your-company.pdf.Google Scholar
- (2020) Unintended consequences: Information releases and CEO stock option grants. Acad. Management J. 63(1):155–180.Crossref, Google Scholar
- (2014) Framing controversial actions: Regulatory focus, source credibility, and stock market reaction to poison pill adoption. Acad. Management J. 57(6):1734–1758.Crossref, Google Scholar
- (2013) Cheap talk and credibility: The consequences of confidence and accuracy on advisor credibility and persuasiveness. Organ. Behav. Human Decision Processes 121(2):246–255.Crossref, Google Scholar
- (1980) Impression Management (Brooks/Cole Pub. Co, Monterey, CA).Google Scholar
- SEC (2012) Fast answers: Schedule 13D. Accessed June 14, 2021, https://www.sec.gov/fast-answers/answerssched13htm.html.Google Scholar
- SEC (2019) EDGAR filer manual (volume II). Accessed June 14, 2021, https://www.sec.gov/info/edgar/forms/edgform.pdf.Google Scholar
- (2019) Examination of CEO–CFO social interaction through language style matching: Outcomes for the CFO and the organization. Acad. Management J. 62(2):383–414.Crossref, Google Scholar
- (2020) Portfolio spillover of institutional investor activism: An awareness-motivation-capability perspective. Acad. Management J. 63(6):1865–1892.Crossref, Google Scholar
- (1995) Cueing and cognitive conflict in judge-advisor decision making. Organ. Behav. Human Decision Processes 62(2):159–174.Crossref, Google Scholar
- (1989) Accuracy and confidence in group judgment. Organ. Behav. Human Decision Processes 43(1):1–28.Crossref, Google Scholar
- (2001) Trust, confidence, and expertise in a judge-advisor system. Organ. Behav. Human Decision Processes 84(2):288–307.Crossref, Google Scholar
- (2001) Word use in the poetry of suicidal and nonsuicidal poets. Psychosomatic Medicine 63(4):517–522.Crossref, Google Scholar
- (2010) The psychological meaning of words: LIWC and computerized text analysis methods. J. Language Soc. Psych. 29(1):24–54.Crossref, Google Scholar
- (1984) Impression management and influence in the organization. Bacharach S, Lawler E, eds. Research in the Sociology of Organizations (JAI, Greenwich, CT), 31–58.Google Scholar
- (2009) Expert Political Judgment. How Good Is It? How Can We Know? (Princeton University Press, Princeton, NJ).Crossref, Google Scholar
- (2015) Superforecasting. The Art and Science of Prediction (Crown/Archetype, New York).Google Scholar
- (1995) The confidence heuristic: A game-theoretic analysis. J. Econom. Psych. 16(1):97–113.Crossref, Google Scholar
- (1994) Perceived expertise and its effect on confidence. Organ. Behav. Human Decision Processes 57(2):290–302.Crossref, Google Scholar
- (2020) It’s not what you say, it’s how you say it: Conversational flow as a predictor of networking success. Organ. Behav. Human Decision Processes 158:1–10.Crossref, Google Scholar
- (1974) Judgment under uncertainty: Heuristics and biases. Science 185(4157):1124–1131.Crossref, Google Scholar
- (2019) Do disruptive visions pay off? The impact of disruptive entrepreneurial visions on venture funding. J. Management Stud. 56(2):303–342.Crossref, Google Scholar
- (2019) Are you 110% sure? Modeling of fractions and proportions in strategy and management research. Strategic Organ. 43(6):1–26.Google Scholar
- (2014) Managers and analysts: An examination of mutual influence. Acad. Management J. 57(3):849–868.Crossref, Google Scholar
- (1990) Influence tactics, affect, and exchange quality in supervisor-subordinate interactions: A laboratory experiment and field study. J. Appl. Psych. 75(5):487–499.Crossref, Google Scholar
- (1995) Effects of impression management on performance ratings: A longitudinal study. Acad. Management J. 38(1):232–260.Crossref, Google Scholar
- (2011) Avoiding bad press: Interpersonal influence in relations between CEOs and journalists and the consequences for press reporting about firms and their leadership. Organ. Sci. 22(4):1061–1086.Link, Google Scholar
- (2010) A matter of appearances: How corporate leaders manage the impressions of financial analysts about the conduct of their boards. Acad. Management J. 53(1):15–44.Crossref, Google Scholar
- (2020) Symbolic Management (Oxford University Press, Oxford, UK).Crossref, Google Scholar
- (2013) A behavioral theory of corporate governance: Explicating the mechanisms of socially situated and socially constituted agency. Acad. Management Ann. 7(1):607–661.Crossref, Google Scholar
- (2012) Helping other CEOs avoid bad press. Admin. Sci. Quart. 57(2):217–268.Crossref, Google Scholar
- (2020) Activist hedge fund success: The role of reputation. Strategic Management J. 41(13):2493–2517.Crossref, Google Scholar
- (2019) Misaccounting for endogeneity: The peril of relying on the Heckman two-step method without a valid instrument. Strategic Management J. 40(3):432–462.Crossref, Google Scholar
- (2021) Sensitivity analysis for network observations with applications to inferences of social influence effects. Network Sci. 9(1):73–98.Crossref, Google Scholar
- (2018) Sentiment, richness, authority, and relevance model of information sharing during social crises—The case of #MH370 tweets. Comput. Human Behav. 89:199–206.Crossref, Google Scholar
- (1996) Good probabilistic forecasters: The ‘consumer’s’ perspective. Internat. J. Forecasting 12(1):41–56.Crossref, Google Scholar
- (2019) Exploring presence in online learning through three forms of computer-mediated discourse analysis. Distance Edu. 40(2):205–225.Crossref, Google Scholar

