Abstract

http://ssrn.com/abstract=2079131
 
 

References (52)



 


 



Shareholder Activism and Voluntary Disclosure Initiation: The Case of Political Spending


Vishal P. Baloria


Boston College

Kenneth J. Klassen


University of Waterloo - School of Accounting and Finance

Christine I. Wiedman


University of Waterloo

October 15, 2015

CAAA Annual Conference 2013

Abstract:     
Using corporate political spending disclosures as our empirical setting, we conduct a detailed inquiry of shareholder proposals to highlight the role of shareholder activism in the diffusion of disclosure practices. We examine a sample of 541 political spending-related shareholder proposals from 2004 to 2012. In a departure from prior research, we examine both proposals voted on and proposals withdrawn by the activist, allowing us to more comprehensively assess the success of shareholder activism. We find that 20% of disclosure proposals are subsequently implemented by targeted firms, with implementation rates varying significantly by proposal type – 8% for proposals voted on versus 56% for withdrawn proposals. We also find that unions and public pension funds are less likely to target firms with agency problems, are less successful in having proposals withdrawn, and the implementations they do obtain are viewed as value-destroying by the broader investor base. Our findings highlight shareholder proposals as one mechanism by which investors can express their preferences for and successfully influence corporate disclosure policies. Given activists’ long-standing interest in compensation and social disclosure policies, we believe our findings can generalize to these other disclosure settings.

Number of Pages in PDF File: 60

Keywords: shareholder activism, corporate political spending, disclosure, political ideology, agency problems

JEL Classification: G34, H32, M41


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Date posted: June 7, 2012 ; Last revised: October 16, 2015

Suggested Citation

Baloria, Vishal P. and Klassen, Kenneth J. and Wiedman, Christine I., Shareholder Activism and Voluntary Disclosure Initiation: The Case of Political Spending (October 15, 2015). CAAA Annual Conference 2013. Available at SSRN: http://ssrn.com/abstract=2079131 or http://dx.doi.org/10.2139/ssrn.2079131

Contact Information

Vishal P. Baloria (Contact Author)
Boston College ( email )
140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
647-883-6469 (Phone)
Kenneth Klassen
University of Waterloo - School of Accounting and Finance ( email )
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 x38550 (Phone)
519-888-7562 (Fax)
Christine I. Wiedman
University of Waterloo ( email )
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 x.3732 (Phone)
519-888-7562 (Fax)
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