Looking a Gift Horse in the Mouth: A Reassessment of the Impact of the Hershey Trust

This paper summarizes arguments and counterarguments driving academic discussion about the Milton Hershey School (MHS) Company’s control mechanism, enacted by Trust (HT). It then studies Trust’s governance with respect to ethics, budget sources, management, focusing on how Company exercises corporate over MHS. My main tool of analysis is an event study, which estimates a particularly abnormal response stock price potentially disruptive developments. Empirical results indicate that has not been greatly influenced Trust. Abnormal return skewed, it asymmetric probability distribution after June 2016. However, continues indirectly manage Company. The Trust, accordingly, de facto ‘industrial foundation’. Thus, charitable trustees affect management. HT MHS had mistaken because diversification lies beneficiations trust per se, shareholders should end their puppet dominance HT’s MHS’s future 501(c)(3) status will be jeopardized. Overall, this presents empirical results, aimed at building more organization. audience for includes policymakers, regulators, academics.