Social gains from the public relations voice of activist investors: The case of Herbalife and Pershing Square Capital Management

This article investigates the purpose, practice and outcome of the financial public relations (PR) of activist investors, which is framed as the exercise of the activist voice.The object of investigation is the organizational discourse of the activist hedge fund Pershing Square Capital Management during an investment position it took in the health products firm, Herbalife, from 2012 onwards. Pershing Square spent $50 million dollars (USD) on investigations and campaigning and this public relations output was interpreted using a combination of organizational discourse analysis and narrative analysis.Pershing Square delivered a social gain, when the regulator intervened to levy a fine to redress the losses of Herbalife distributors and ordered the company to change its business practices. With this change in governance, Pershing Square achieved the type of social gain normally associated with social activism or corporate social responsibility.The case suggests that the economically-derived exit-voice-loyalty continuum is a useful theoretical frame for considering social gains arising from the public relations of activist investors. Moreover, the findings suggest potential for future work considering public relations as a process that enables, enhances and enacts the vocalization of economic, social and political interests.