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Balancing Governance and Culture to Create Sustainable Firm Value
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Balancing Governance and Culture to Create Sustainable Firm Value

Jillian Popadak
Brookings Institution, 2016
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Editorial Rating

7

Qualities

  • Well Structured
  • For Experts

Recommendation

Activist shareholders have become more strident in their efforts to release the value they believe exists in the businesses in which they invest. Academic Jillian Popadak looks at the impact of such shareholder governance, which focuses more on hard returns and less on the softer aspects of corporate culture, such as customer focus. Her intriguing research provides some balancing perspective that getAbstract believes will benefit business executives, academics and investors.

Take-Aways

  • Activist investors, through shareholder governance, are increasingly demanding a greater say in how corporations manage their businesses.
  • Activist shareholders aren’t keen on companies’ culture-specific qualities, such as “cooperation, collaboration and customer orientation,” because returns from these “implicit rules for behavior” are difficult to quantify.
  • Yet a survey of more than 1,800 senior executives worldwide found that culture ranks among the top three elements affecting a firm’s performance.

About the Author

Jillian Popadak is an assistant professor at Duke University’s Fuqua School of Business.

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