Mutual Fund Board Connections and Proxy Voting

49 Pages Posted: 12 Oct 2018

See all articles by Paul Calluzzo

Paul Calluzzo

Queen's University - Smith School of Business

Simi Kedia

Rutgers Business School

Date Written: September 20, 2018


We study fund-firm connections that arise when firm executives and directors serve as fund directors. We find that connected funds are significantly more likely to vote with management in proposals with negative ISS recommendations or low shareholder support. As our data shows that management support does not exist either before connection formation or after its termination, this result is unlikely to be caused by omitted factors. Rather, the connected fund’s voting patterns show independence from ISS recommendations and successful connected voting is associated with positive announcement returns, suggesting that connected fund support for management reflects information advantages. Lastly, we find that a fund family and firm are more likely to connect when the fund family holds a large stake in the firm and is geographically proximate, as well as when it has a record of voting independently from ISS.

Suggested Citation

Calluzzo, Paul and Kedia, Simi, Mutual Fund Board Connections and Proxy Voting (September 20, 2018). Journal of Financial Economics (JFE), Forthcoming, Available at SSRN:

Paul Calluzzo (Contact Author)

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6

Simi Kedia

Rutgers Business School ( email )

117 Levin
94 Rockafellar Road
Piscataway, NJ
United States
8484454195 (Phone)

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