On June 21-22, Digital Banking Lab Postdoctoral Research fellow Sergii Nevmerzhytskyi presented new research at the Global Business and Comparative Corporate Governance Research Conference, hosted by the Ross School of Business at the University of Michigan.
Chaired by Professor Jordan Siegel from the University of Michigan, the conference brought together scholars from Florida Atlantic University, Georgetown University, Harvard University, HEC Paris, Rice University, Stanford University, University of California Berkeley, University of Michigan, and Western University.
The two-day conference combined research presentations with smaller, focused discussions of on ongoing projects. This format gave participants an opportunity to engage directly with one another’s work, receive detailed feedback, and exchange ideas on emerging research in corporate governance and strategy. Unlike large-format academic conferences where presenters often get lost in the crowd, this specialized setting at the University of Michigan gathered a targeted group of aspiring scholars in one place, which encouraged active networking, scholarly debate, and deep knowledge sharing among all the participants.
Nevmerzhytskyi presented “Voice, Exit and Aspirations: A Relative Performance View of Shareholder Activism,” a manuscript co-authored with Professor Romel Mostafa. The study applies a behavioural strategy perspective to examine how shareholders respond when a firm’s performance diverges from expectations.
Within the study, voice refers to the active expression of critical opinions, while exit refers to the deliberate reduction or termination of a shareholder’s financial relationship with a firm. These represent two distinct forms of shareholder response that can follow assessments of firm performance.
Prior research has generally posited a linear relationship between firm performance and shareholder voice, whereby declining performance leads to more shareholder proposals. The study challenges this view by developing a relative performance framework. It argues that shareholders evaluate firms against peer benchmarks, interpreting deviations from these aspirations as gains or losses. As a result, both underperformance and overperformance can trigger active shareholder responses: relative underperformance can motivate activism aimed at improving value creation, while relative overperformance can raise concerns about the appropriation of surplus.
The research further examines how these dynamics shape shareholder engagement with organizational search, particularly whether R&D investment is viewed as a credible mechanism for correcting performance or as an agency concern, depending on a firm’s relative performance.
The study also conceptualizes shareholder voice and exit as co-determined governance mechanisms rather than independent alternatives. Exit can reshape voice by altering investor composition, influencing risk preferences and coordination capacity, and ultimately affecting coalition formation and shareholder engagement. Using a panel of S&P 1500 firms, the study analyzes shareholder proposals as a measure of voice and ownership changes as a measure of exit to test these relationships.
Overall, the paper advances a non-monotonic, reference-dependent view of shareholder activism that brings voice, exit, and organizational search together within a unified behavioural framework.
The research contributes to shareholder studies by connecting them with the behavioural theory of the firm and developing a relative perspective on shareholder responses to both underperformance and overperformance. For practitioners, the findings suggest that shareholder pressure can build not only when firms underperform, but also when they perform above relevant reference points.
Importantly, those reference points are not necessarily defined by the firm itself. They can also emerge from shareholder attention to the performance of peer firms. This suggests that organizations need to understand their performance relative to comparable firms, even when their absolute performance remains satisfactory, in order to anticipate and respond to shareholder demands.
The conference also provided valuable, targeted feedback on the ongoing research project. Participating scholars offered guidance on methodological approaches that could strengthen the empirical testing of the hypotheses, ways to improve the overall clarity of the manuscript, and additional framing approaches for communicating the findings more effectively to both academic and management audiences.
The authors are grateful to the organizers of the Global Business and Comparative Corporate Governance Research Conference for creating a focused setting in which scholars could share, discuss, and strengthen ongoing research.
Participation in the conference was made possible with support from the Lawrence National Centre for Policy and Management and the Scotiabank Digital Banking Lab at Ivey Business School.