Governance Changes through Shareholder Initiatives: The Case of Proxy Access
75 Pages Posted: 26 Jul 2015 Last revised: 21 Feb 2019
Date Written: February 18, 2019
We study a regulatory change that permitted shareholder proposals to instate proxy access. It generated over 300 proposals and led more than 250 firms to adopt proxy access from 2012 to 2016. The firms expected to benefit most from proxy access have the most positive market reaction to receiving a proposal. However, proposals and adoptions are not concentrated at these firms, instead being common at large, well-governed firms. We provide evidence of the tactics used by management to resist proxy access at firms that stand to benefit, and demonstrate that shareholders oppose proxy access more where they have large holdings.
Keywords: Shareholder Proposals, Proxy Access, Private Ordering, Corporate Governance, Activism, Regulation
JEL Classification: G34,G38,K22
Suggested Citation: Suggested Citation