Voting for Socially Responsible Corporate Policies

53 Pages Posted: 1 Apr 2022 Last revised: 3 May 2024

See all articles by Adam Meirowitz

Adam Meirowitz

Yale University

Shaoting Pi

Ivy College of Business, Iowa State University

Matthew C. Ringgenberg

University of Utah - Department of Finance

Date Written: March 31, 2024

Abstract

We examine voting for corporate policies when voters face a trade-off between maximizing firm value and implementing social objectives (like minimizing pollution). We show voting can aggregate preferences and lead to stable policies when there is one social objective but when voters care about two or more it leads to governance indeterminacy and volatility in policies. However, there are exceptions: the presence of blockholders makes it possible to achieve stable policies even with more than two objectives and controlling the voting agenda can significantly influence vote outcomes. Our results generate novel predictions about the rise of multi-dimensional firm objectives.

Keywords: Corporate governance, ESG, Shareholder Voting, Social Choice Theory, Socially Responsible Investing, Sustainability

JEL Classification: G12, G14

Suggested Citation

Meirowitz, Adam and Pi, Shaoting and Ringgenberg, Matthew C., Voting for Socially Responsible Corporate Policies (March 31, 2024). Available at SSRN: https://ssrn.com/abstract=4057792 or http://dx.doi.org/10.2139/ssrn.4057792

Adam Meirowitz

Yale University ( email )

493 College St
New Haven, CT CT 06520
United States

Shaoting Pi

Ivy College of Business, Iowa State University ( email )

2330 Gerdin Business Building
Ames, IA 50011
United States

Matthew C. Ringgenberg (Contact Author)

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
327
Abstract Views
1,607
Rank
172,999
PlumX Metrics