Board of Directors' Responsiveness to Shareholders: Evidence from Shareholder Proposals

61 Pages Posted: 1 Oct 2005 Last revised: 23 Sep 2012

See all articles by Fabrizio Ferri

Fabrizio Ferri

University of Miami - Miami Business School

Yonca Ertimur

University of Colorado at Boulder - Department of Accounting

Stephen Stubben

University of Utah

Multiple version iconThere are 2 versions of this paper

Date Written: December 2007

Abstract

Using a sample of 620 non-binding, majority-vote (MV) shareholder proposals between 1997 and 2004, we analyze the frequency, determinants and consequences of boards' implementation decisions. The frequency of implementation has almost doubled after 2002, reaching more than 40%. Shareholder pressure (e.g. the voting outcome and the influence of the proponent) and the type of proposals are the main determinants of the implementation decision, while traditional governance indicators do not seem to matter. Outside directors implementing MV shareholder proposals experience a one-fifth reduction in the likelihood of losing their board seat and in the likelihood of losing other directorships.

Keywords: shareholder proposals, shareholder activism, director labor market

JEL Classification: G34

Suggested Citation

Ferri, Fabrizio and Ertimur, Yonca and Stubben, Stephen, Board of Directors' Responsiveness to Shareholders: Evidence from Shareholder Proposals (December 2007). AAA 2007 Management Accounting Section (MAS) Meeting; 3rd Annual Conference on Empirical Legal Studies Papers. Available at SSRN: https://ssrn.com/abstract=816264 or http://dx.doi.org/10.2139/ssrn.816264

Fabrizio Ferri (Contact Author)

University of Miami - Miami Business School ( email )

Coral Gables, FL 33146-6531
United States

Yonca Ertimur

University of Colorado at Boulder - Department of Accounting ( email )

419 UCB
Boulder, CO 80309-0419
United States

Stephen Stubben

University of Utah ( email )

1655 E. Campus Center
Salt Lake City, UT 84112
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
613
Abstract Views
3,579
rank
22,654
PlumX Metrics