An activist investor’s successful corporate governance and strategic management impacts: An updated L Brands case study
Open Access
- 3 December 2021
- journal article
- Published by Virtus Interpress in Corporate Board: role, duties and composition
- Vol. 17 (3), 61-71
- https://doi.org/10.22495/cbv17i3art5
Abstract
The key research aim of this paper is to analyze whether an activist investor’s recommendations for financial, corporate governance, and strategic management performances were successful or not. This paper updates the initial case study of the activist investor, Barington Capital Group, in analyzing the performance of a public company, L Brands, which had lost $20 billion in market capitalization in the last three years prior to the public letter from Barington to the L Brands CEO in March 2019. This updated case study analyzes whether Barington’s initial recommendations worked as operational guidelines for improving L Brands’ financial, corporate governance, and strategic management performances. From its financial analysis, Barington recommended either an initial public offering of the superior performing Bath & Body Works brand or a spinoff of the weak performing Victoria’s Secret brand. From its corporate governance and strategic management analysis, Barington recommended that L Brands improve the composition of its board of directors whose deficiencies in director independence, industry experience, and diversity hindered its ability to effectively oversee and advise strategic management. It is important to note that this paper was prepared exclusively with public information.Keywords
This publication has 19 references indexed in Scilit:
- Institutional investors’ activism under concentrated ownership and the role of proxy advisors. Evidence from the Italian say-on-payCorporate Ownership and Control, 2017
- Ethics and compliance committees of corporate boards: Rationale, domain, and skill sets of membersCorporate Ownership and Control, 2017
- CEO duality and corporate social responsibility reporting: Evidence from MalaysiaCorporate Ownership and Control, 2017
- Voting dissent and corporate governance structures: The role of say on pay in a comparative analysisCorporate Ownership and Control, 2016
- Ashland Inc announces plan to separate into two independent, publicly traded companiesFocus on Surfactants, 2015
- Perspectives and obstacles of the shareholder activism implementation: A comparative analysis of civil and common law systemsCorporate Ownership and Control, 2015
- No exit!: The logic of defensive shareholder activismCorporate Board: role, duties and composition, 2014
- Does CEO duality is really matter? Evidence from an emerging marketCorporate Ownership and Control, 2011
- Shareholder activism in good and bad economic timesCorporate Ownership and Control, 2011
- CEO duality and firm performance - an endogenous issueCorporate Ownership and Control, 2008