I examine the governance outcomes induced by NGO campaigns targeting firms. Using a unique dataset on NGO activism that raises Environmental, Social, and Governance (ESG) issues, I establish an association between NGO campaigns and several governance outcomes, including forced CEO turnover, executive pay, and the implementation of ESG-linked compensation. I also find that NGO campaigns garner support from shareholders through a higher number of submitted shareholder resolutions and a percentage of dissent votes cast against management-sponsored proposals. I further establish causality by implementing the staggered adoption of Anti-SLAPP laws in the U.S. and the strike of natural disasters as two exogenous sources of variation in NGO activism targeting firms. The findings have important policy and practical implications. First, they unveil the critical yet largely ignored role that NGOs can play in corporate governance. Hence, further policy initiatives empowering NGOs and nonprofits could result in stronger monitoring of firm behaviour. Second, the results underscore the costly nature of NGO campaigns for corporate leadership. They result in adverse personal outcomes for executives and trigger shareholder dissatisfaction, making it vital for managers to develop a better understanding of the consequences of and adequate responses to NGO activism.
