Shareholder Voting and Corporate Governance Around the World
Pennsylvania State University - Department of Finance
Karl V. Lins
University of Utah - Department of Finance
Darius P. Miller
Southern Methodist University (SMU) - Edwin L. Cox School of Business
University of Alberta - Department of Finance and Statistical Analysis
April 21, 2014
AFA 2012 Chicago Meetings Paper
We investigate whether the votes cast by U.S. institutional investors in elections for 8,160 non-U.S. firms across 43 countries are consistent with an effective shareholder voting process. We find that investor support for firms’ voting recommendations is lower when country-level investor protection is weak or firm-level managerial entrenchment is high, indicating that investors exercise dissent voting when they fear expropriation. Further, greater dissent voting is associated with greater director turnover and lower M&A deal completion rates, indicating that voting impacts firm policy. We conclude that shareholder voting is an effective mechanism for exercising governance across the world.
Number of Pages in PDF File: 63
Keywords: Corporate Governance, Voting, Insider Control, Shareholder Protection, Institutional Investors
JEL Classification: D7, F30, G15, G32, G34, K22working papers series
Date posted: November 4, 2010 ; Last revised: April 22, 2014
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