Small Shareholder Participation in European AGMs

Partly published in: Lafarre, Anne (2017). The AGM in Europe: Theory and practice of shareholder behaviour: Emerald Group Publishing

Conference working paper European Association of Law and Economics, (EALE, London 2017).

47 Pages Posted: 17 Oct 2018

See all articles by Anne Lafarre

Anne Lafarre

Tilburg Law School, Business Law Department; Tilburg Law School

Date Written: July 31, 2017

Abstract

This study investigates an important but under-researched topic in Europe, the small shareholder turnout decision. We assess which factors contribute to (small) shareholder participation using a hand-collected panel dataset with information about turnout rates, voting behaviour, and ownership structures of companies that are listed in seven European Member States. We document how ownership concentration positively affects total shareholder turnout, but has a negative effect on small shareholder turnout. Voting power also affects small turnout rates: the greater small shareholder voting power, the greater their eagerness to vote. In addition, total and small shareholder turnout is higher the more important the meeting agenda. And, small shareholders tend to free-ride on large institutional shareholders and corporate insiders, but the magnitude of the free-rider effect is larger for the latter category of blockholders. Our results provide some important insights for the debate on shareholder rights and the role of the AGM in corporate governance. The results show that, despite the criticism, the AGM still plays a role in small shareholder monitoring. Some topics seem to clearly motivate small shareholders to attend, while others are less relevant. Policy makers can stimulate shareholder monitoring by focusing on the factors that determined in this study.

Keywords: corporate governance, shareholder activism, shareholder rights, corporate ownership

Suggested Citation

Lafarre, Anne, Small Shareholder Participation in European AGMs (July 31, 2017). Partly published in: Lafarre, Anne (2017). The AGM in Europe: Theory and practice of shareholder behaviour: Emerald Group Publishing; Conference working paper European Association of Law and Economics, (EALE, London 2017). . Available at SSRN: https://ssrn.com/abstract=3249428 or http://dx.doi.org/10.2139/ssrn.3249428

Anne Lafarre (Contact Author)

Tilburg Law School, Business Law Department ( email )

Tilburg, 5000 LE
Netherlands

Tilburg Law School ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

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