Walk the Talk: Shareholders’ Soft Engagement at Annual General Meetings

Center for Financial Studies Working Paper No. 689, 2023

56 Pages Posted: 23 Feb 2023

See all articles by Alix Auzepy

Alix Auzepy

University of Giessen

Christina E. Bannier

Justus-Liebig-University Giessen

Fabio Martin

University of Giessen - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: January 16, 2023

Abstract

The right to ask questions and voice their opinions at annual general meetings (AGMs) represents one of the few avenues for shareholders to communicate directly and publicly with the firm’s management. Examining AGM transcripts of U.S. companies between 2007 and 2021, we find that shareholders actively express their concerns about environmental, social and governance (ESG) issues in accordance with their specific relationship with the company. Further, they are also demonstrably more vocal about ESG issues at AGMs of firms with poor sustainability performance. What is more, we show that this soft engagement translates into a more negative tone which, in turn, results in lower approval rates for management proposals. Shareholders’ soft engagement at AGMs is hence an effective way to “walk the talk”.

Keywords: shareholder engagement, annual general meeting, ESG, textual analysis

JEL Classification: G03, G23, G34, G39

Suggested Citation

Auzepy, Alix and Bannier, Christina E. and Martin, Fabio, Walk the Talk: Shareholders’ Soft Engagement at Annual General Meetings (January 16, 2023). Center for Financial Studies Working Paper No. 689, 2023, Available at SSRN: https://ssrn.com/abstract=4363122 or http://dx.doi.org/10.2139/ssrn.4363122

Alix Auzepy

University of Giessen ( email )

Licher Str. 64
Giessen, 35394
Germany

Christina E. Bannier (Contact Author)

Justus-Liebig-University Giessen ( email )

Licher Str. 62
Gießen, 35394
Germany
+49 641 99 22551 (Phone)

Fabio Martin

University of Giessen - Department of Finance ( email )

Giessen
Germany

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