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The Elimination of Broker Voting in Director Elections

15 Pages Posted: 17 Dec 2011 Last revised: 22 Mar 2017

Ali C. Akyol

University of Melbourne - Department of Finance; Financial Research Network (FIRN)

Konrad Raff

Norwegian School of Economics (NHH)

Patrick Verwijmeren

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: January 20, 2017

Abstract

In 2009, the Securities and Exchange Commission eliminated uninstructed broker voting in director elections. We observe that average director approval rates remain high after the change in regulation, while the probability of a director being voted off the board remains low. Using event study tests we find no evidence of significant wealth effects of the change in regulation. We document that firms are increasingly letting shareholders ratify their auditors after the rule change, which helps in establishing a quorum.

Keywords: Shareholder voting, director elections, Securities and Exchange Commission, board effectiveness

JEL Classification: G34, G38

Suggested Citation

Akyol, Ali C. and Raff, Konrad and Verwijmeren, Patrick, The Elimination of Broker Voting in Director Elections (January 20, 2017). Finance Research Letters, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1973558 or http://dx.doi.org/10.2139/ssrn.1973558

Ali C. Akyol

University of Melbourne - Department of Finance ( email )

198 Berkeley Street
Faculty of Economics and Commerce
Carlton VIC 3010, Victoria 3010
Australia
+61 (3) 8344-5318 (Phone)
+61 (3) 8344-6914 (Fax)

HOME PAGE: http://www.aliakyol.com

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Konrad Raff

Norwegian School of Economics (NHH) ( email )

Department of Finance
Helleveien 30
Bergen, 5045
Norway

HOME PAGE: http://sites.google.com/site/raffkonrad/

Patrick Verwijmeren (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

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