Corporate Governance Proposals and Shareholder Activism: The Role of Institutional Investors

Posted: 9 May 1998

See all articles by Stuart Gillan

Stuart Gillan

University of Georgia - Department of Finance

Laura T. Starks

University of Texas at Austin - Department of Finance

Date Written: July 1998

Abstract

We study shareholder proposals across a period of substantial activity and find systematic differences both across sponsor identity and across time. To understand how these proposals are perceived by other investors, we examine voting outcomes and short-term market reactions conditioned on proposal type and sponsor identity. The voting analysis documents that sponsor identity, issue type, prior performance and time period are important influences on the voting outcome. Moreover, it appears that proposals by institutional and coordinated activists act as substitutes. The nature of the stock market reaction, while typically small, varies according to the issue and the sponsor identity.

JEL Classification: G34

Suggested Citation

Gillan, Stuart L. and Starks, Laura T., Corporate Governance Proposals and Shareholder Activism: The Role of Institutional Investors (July 1998). Available at SSRN: https://ssrn.com/abstract=85308

Stuart L. Gillan (Contact Author)

University of Georgia - Department of Finance ( email )

Terry College of Business
Athens, GA 30602-6253
United States

Laura T. Starks

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-5899 (Phone)
512-471-5073 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
3,097
PlumX Metrics