Abstract

http://ssrn.com/abstract=1477564
 
 

Citations (4)



 
 

Footnotes (116)



 


 



ISS Recommendations and Mutual Fund Voting on Proxy Proposals


James F. Cotter


Wake Forest University Calloway School

Alan R. Palmiter


Wake Forest University - School of Law

Randall S. Thomas


Vanderbilt University - Law School; European Corporate Governance Institute (ECGI)

September 23, 2009

Vanderbilt Law and Economics Research Paper No. 09-20

Abstract:     
We analyze voting data from five proxy seasons (2003-2008) to identify the extent to which shareholders generally, and mutual funds in particular, vote in accordance with the voting recommendations of RiskMetrics’ ISS Corporate Governance Services. We look at voting by all shareholders and voting decisions by mutual funds on non-election and non-routine proxy proposals - both those submitted by management and those submitted by shareholders. We find that shareholders generally tended to vote more consistently with ISS voting recommendations than management recommendations during this period, with more consistency among mutual funds than all shareholders. We also find that independent voting is unusual: Shareholder voting and, even more so, mutual fund voting decisions generally follow either the recommendations of management or of the ISS. Mutual fund voting decisions are consistent with ISS recommendations more frequently than management recommendations, whether the proposal is submitted by management or by shareholders, and whether relating to anti-takeover issues or corporate governance issues. Our univariate results are confirmed by multivariate regressions that examine the weight mutual funds give to ISS recommendations. In short, ISS has an impact on voting by shareholders generally and, across the board, an even greater impact on voting by mutual funds.

Number of Pages in PDF File: 144

Keywords: mutual fund voting, ISS, corporate governance, shareholders

JEL Classification: K22, G30

working papers series


Download This Paper

Date posted: September 24, 2009 ; Last revised: December 16, 2009

Suggested Citation

Cotter, James F. and Palmiter, Alan R. and Thomas, Randall S., ISS Recommendations and Mutual Fund Voting on Proxy Proposals (September 23, 2009). Vanderbilt Law and Economics Research Paper No. 09-20. Available at SSRN: http://ssrn.com/abstract=1477564 or http://dx.doi.org/10.2139/ssrn.1477564

Contact Information

James F. Cotter
Wake Forest University Calloway School ( email )
P.O. Box 7659
Winston-Salem, NC 27109-7659
United States
336-758-7220 (Phone)
Alan R. Palmiter
Wake Forest University - School of Law ( email )
P.O. Box 7206
Winston-Salem, NC 27109
United States
336-758-5711 (Phone)
336-758-4496 (Fax)
Randall S. Thomas (Contact Author)
Vanderbilt University - Law School ( email )
131 21st Avenue South
Nashville, TN 37203-1181
United States
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Feedback to SSRN


Paper statistics
Abstract Views: 1,304
Downloads: 301
Download Rank: 57,008
Citations:  4
Footnotes:  116

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.281 seconds