Board of Directors' Responsiveness to Shareholders: Evidence from Shareholder Proposals
Columbia Business School - Accounting, Business Law & Taxation
University of Colorado at Boulder - Department of Accounting
University of North Carolina
AAA 2007 Management Accounting Section (MAS) Meeting
3rd Annual Conference on Empirical Legal Studies Papers
Using a sample of 620 non-binding, majority-vote (MV) shareholder proposals between 1997 and 2004, we analyze the frequency, determinants and consequences of boards' implementation decisions. The frequency of implementation has almost doubled after 2002, reaching more than 40%. Shareholder pressure (e.g. the voting outcome and the influence of the proponent) and the type of proposals are the main determinants of the implementation decision, while traditional governance indicators do not seem to matter. Outside directors implementing MV shareholder proposals experience a one-fifth reduction in the likelihood of losing their board seat and in the likelihood of losing other directorships.
Number of Pages in PDF File: 61
Keywords: shareholder proposals, shareholder activism, director labor market
JEL Classification: G34working papers series
Date posted: October 1, 2005 ; Last revised: September 23, 2012
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