Leading by Example: Can One Universal Shareholder’s Voting Pre-Disclosure Influence Voting Outcomes?

50 Pages Posted: 13 Dec 2023 Last revised: 8 Apr 2024

See all articles by Rüdiger Fahlenbrach

Rüdiger Fahlenbrach

École Polytechnique Fédérale de Lausanne; Swiss Finance Institute; European Corporate Governance Institute (ECGI)

Nicolas Rudolf

University of Lausanne

Alexis Wegerich

Norges Bank Investment Management (NBIM)

Date Written: December 5, 2023

Abstract

We analyze the impact of a large shareholder disclosing its voting decisions prior to shareholder meetings on final vote outcomes for management and shareholder proposals. We find that pre-disclosures of against votes lead to an average increase of 2.7 percentage points in against votes by other shareholders. Voting pre-disclosures are more effective for proposals with a higher information demand, and if the large shareholder pre-discloses a decision that is not directly observable from its proxy-voting guidelines. The results highlight the potential for large institutional investors to use voting pre-disclosure as a tool for influencing other shareholders and, ultimately, companies.

Keywords: Pre-disclosure, Shareholder Voting, Institutional Investors, Corporate Governance

JEL Classification: G30, G23, G34

Suggested Citation

Fahlenbrach, Rüdiger and Rudolf, Nicolas and Wegerich, Alexis, Leading by Example: Can One Universal Shareholder’s Voting Pre-Disclosure Influence Voting Outcomes? (December 5, 2023). European Corporate Governance Institute – Finance Working Paper No. 958/2024, Available at SSRN: https://ssrn.com/abstract=4660355 or http://dx.doi.org/10.2139/ssrn.4660355

Rüdiger Fahlenbrach

École Polytechnique Fédérale de Lausanne ( email )

Quartier UNIL-Dorigny
Extranef 211
1015 Lausanne, CH-1015
Switzerland
++41-21-693-0098 (Phone)
++41-21-693-3010 (Fax)

HOME PAGE: http://https://www.epfl.ch/labs/sfi-rf/

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Nicolas Rudolf (Contact Author)

University of Lausanne ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015
Switzerland

Alexis Wegerich

Norges Bank Investment Management (NBIM) ( email )

Bankplassen 2
P.O. Box 1179 Sentrum
Oslo, NO-0107
Norway

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