From the American Heritage Book of English Usage:
Okay, Could You Explain
Just What A Gerund Is?
Gerunds are verb forms ending in -ing that act as nouns. They can be the subject of a sentence (Skiing is her favorite sport), the object of a verb (She enjoys skiing), or the object of a preposition (She devoted her free time to skiing). Gerunds can be modified like nouns (That book makes for difficult reading). But they can also act like verbs in that they can take an object (Convincing him was never easy) and be modified by an adverb (Walking daily can improve your health).
gerund and possessives (fused participle). Some people insist that when a gerund is preceded by a noun or pronoun, the noun or pronoun must be in the possessive case. Accordingly, it is correct to say I can understand his wanting to go, but incorrect to say I can understand him wanting to go. But the construction without the possessive, sometimes called the fused participle, has been used by respected writers for 300 years and is perfectly idiomatic. Moreover, there is often no way to “fix” the construction by inserting the possessive. This is often the case with common nouns. Thus you can say We have had very few instances of luggage being lost, but not … of luggage’s being lost.
Sometimes syntax makes using the possessive impossible. Consider the sentence What she objects to is men making more money than women for the same work. Changing men making to men’s making not only sounds awkward, but it requires women’s at the other end to keep the sentence parallel, and women’s simply does not work.
Be aware that sometimes nouns ending in -s can be confused with a singular noun in the possessive. Thus I don’t approve of your friend’s going there indicates one friend is going, and I don’t approve of your friends going there indicates that more than one friend is going.