Collective Activism *

 Can investor stewardship codes that call for coordinated activism be satisfied by an Investor Collective Action Organization (ICAO)? In an ICAO, investors work collectively, like a large shareholder, to monitor management and increase value. We analyze the endogenous formation of an ICAO and its equilibrium size, considering free-rider problems and coordination costs. While the ICAO overcomes free-rider problems among its members, it exacerbates them between the ICAO and solo activists. The benefit of joining an ICAO is hump-shaped in size. With moderate coordination costs, ICAO formation features multiple equilibria. Small changes in coordination costs significantly influence ICAO formation and activism.