Board of Directors' Responsiveness to Shareholders: Evidence from Shareholder Proposals
50 Pages Posted: 20 Mar 2008 Last revised: 1 Sep 2010
There are 2 versions of this paper
Board of Directors' Responsiveness to Shareholders: Evidence from Shareholder Proposals
Date Written: August 30, 2010
Abstract
In recent years boards have become significantly more likely to implement nonbinding, majority-vote (MV) shareholder proposals. Using a sample of 620 MV proposals between 1997 and 2004, we find that 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 affect the decision. We then examine the labor market consequences of the implementation decision for outside directors and find that directors implementing MV shareholder proposals experience a one-fifth reduction in the likelihood of losing their board seat as well as other directorships.
Keywords: shareholder proposals, shareholder activism, director labor market
JEL Classification: G34
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Corporate Governance and Shareholder Initiatives: Empirical Evidence
By Jonathan M. Karpoff, Paul H. Malatesta, ...
-
The Impact of Shareholder Activism on Target Companies: A Survey of Empirical Findings
-
Shareholder Activism and Corporate Governance in the United States
-
Monitoring: Which Institutions Matter?
By Kai Li, Jarrad Harford, ...
-
Hedge Fund Activism, Corporate Governance, and Firm Performance
-
By Tim C. Opler and Jonathan S. Sokobin
-
The Evolution of Shareholder Activism in the United States
By Stuart Gillan and Laura T. Starks