Integrated corporate governance and management control framework to reduce shareholder activism

Purpose paper Demonstrate how the instruments of corporate governance and management control, when used together, can mitigate the problems arising from shareholder activism. Research design, methodology and approach This study adopted an interventionist research design, conducted in a mid-sized, family-owned. Data collection involved interviews with shareholders and the management team, which were subjected to content analysis using Atlas.ti, and was complemented by the analysis of documents related to the management control system and corporate governance. Findings A seven-pillar governance and management control framework was proposed and implemented. Based on the intervention and implementation process of this framework, we reflected on the contextual factors and the specific instruments employed. Our reflections highlighted the paramount importance of respecting activist shareholders as individuals and treating their values and principles as non-negotiable. Originality The development of a framework that integrates Corporate Governance and Management Control is expected to serve as a bridge to manage and mitigate shareholders’ activism issues. Practical implications Research This study proposes a methodological framework that can be applied in similar contexts in which shareholder activism is observed in family businesses in process of succession.