Activist investors destroying companies, costing jobs: Top corporate lawyer
This article is about how Activist investors are destroying companies and causing unemployment. According to Martin Lipton (a US corporate lawyer), the shareholders are ‘becoming too powerful’ and in the long run may result into companies getting weaker. According to Lipton, companies with activist shareholders ‘disappear within 2.5 years’. He adds that management-centric governance focuses on long-term goals of the company compared to the shareholder-centric governance.
However, while the management may focus on the long-term success of the firm, there is no doubt the shareholder centric governance looks at the bigger picture in a company. In most cases, the management will focus on maximizing revenue. This is indeed a good thing since the main objective of every firm is to make profits. However, Lipton seems to overlook the fact that firms need to carry out their social responsibilities like environmental protection and sustainability, among others. If the firm is only able to make profits but cannot create a shared value, then it is of less benefit to society. Therefore, activist shareholders are beneficial to firms.

http://www.bnn.ca/News/2013/10/8/Activist-investors-destroying-companies-costing-jobs-Top-corporate-lawyer.aspx