What Are the Shareholder Value Implications of Non-Voted Shareholder Proposals?

Maxime Couvert
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Maxime Couvert: Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute

No 18-79, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Managerial resistance precludes half of shareholder-initiated proposals from reaching the ballot stage. I construct a novel dataset of excluded and withdrawn proposals from the Securities and Exchange Commission's responses to managers' exclusion requests. An examination of announcement returns to the exclusion and withdrawal decisions reveals that non-voted proposals have a value-destroying nature. Special interest investors pursuing self-serving agendas and retail investors advocating for one-size-fits-all reforms explain the harmful character of non-voted proposals. I correct for the selection bias induced by managerial resistance and show that focusing only on voted proposals overstates the shareholder proposals-driven value creation.

Keywords: Corporate Governance; Corporate Social Responsibility; Shareholder Proposals; Shareholder Empowerment; Institutional Investors (search for similar items in EconPapers)
JEL-codes: G23 G32 G34 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2018-12
New Economics Papers: this item is included in nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1879

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