Awareness by top managers of the existence of external investors in the form of individuals (e.g., Carl Icahn) and groups (e.g., hedge funds) often positively influences them to align their interests with shareholders.

Question

Quizplus · Accepted Answer

When top managers are aware of the presence of external investors, they tend to align their interests with shareholders to avoid the risk of losing support or facing pressure from those investors. This increases the likelihood of positive outcomes for shareholders.

Awareness by Top Managers of the Existence of External Investors