Digging for Gold: Paulson & Co.'s Activism in the Gold Sector
The case describes the efforts of hedge fund Paulson & Co to influence corporate governance and improve performance in the gold industry. In an innovative move, the hedge fund led the creation of the Shareholder Gold Council, a consortium of large investors in gold companies to push gold mining companies to adopt higher levels of corporate governance. The case describes the motivation and process that led to the creation of the SGC and the initial work of the SGC. The case also discusses the variety of techniques that Paulson & Co uses to press for better performance at gold mining companies such as buying majority ownership and pursuing activist proxy contests in addition to its work at the SGC. The case serves as a vehicle for students to discuss how investors can engage with companies to drive their desired corporate governance goals. In particular, the case develops the idea of collective action by investors and the opportunities and challenges in doing so.