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
June 26, 2013
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 the most. Further, greater dissent voting is associated with greater director turnover and lower M&A deal completion rates, particularly in weak investor protection countries, indicating that shareholder votes impact firm policy. We conclude that shareholder voting is an effective channel through which corporate governance is exercised in firms across the world.
Number of Pages in PDF File: 43
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: July 17, 2013
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