Does disclosure regulation affect mutual fund families' proxy voting?

The Accounting Review, Forthcoming 

51 Pages Posted: 13 Dec 2024

See all articles by Eunjee Kim

Eunjee Kim

Texas A&M University - Mays Business School

Date Written: November 05, 2024

Abstract

Nonactivist investors that own more than five percent of a firm must report their holdings by filing a 13G in which they must commit to not influencing control of the firm. Mutual fund families are the most common investors filing 13Gs. I study whether the 13G requirement affects mutual fund families' voting in proxy contests. I find mutual fund families that file the form are less likely to vote for activist proposals than are those that do not, suggesting that the requirement discourages mutual fund families from supporting activists who seek to influence control of the firm. The effects strengthen when vote outcomes directly affect the firm's control and when activists pose a higher threat to the firm. I further document that the aggregate voting power of 13G-filing mutual fund families correlates with management winning contested votes and retaining board seats during proxy contests.

Keywords: JEL Classification: G34, G23, G38, K22, L51, M12 Schedule 13G, proxy voting, proxy contests, mutual funds, regulations

Suggested Citation

Kim, Eunjee, Does disclosure regulation affect mutual fund families' proxy voting? (November 05, 2024). The Accounting Review, Forthcoming , Available at SSRN: https://ssrn.com/abstract=5010688 or http://dx.doi.org/10.2139/ssrn.5010688

Eunjee Kim (Contact Author)

Texas A&M University - Mays Business School ( email )

4113 TAMU
Wehner 449K
College Station, TX 77843-4218
United States

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