Influence of Public Opinion on Investor Voting and Proxy Advisors

Reena Aggarwal, Isil Erel and Laura T. Starks
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Reena Aggarwal: Georgetown University
Isil Erel: OH State University
Laura T. Starks: University of TX

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: We examine the evolution in voting patterns across firms over time. We find that investors have become more independent in their voting decisions, voting less with the recommendations of management or proxy advisors. Even when the proxy advisor recommends voting against a proposal, we find that over time investors are more likely to ignore the recommendation. Moreover, we also find that proxy advisory recommendations have become more supportive of shareholder proposals. Our main contribution is to examine the role of public opinion in influencing shareholder voting. We show that public opinion on corporate governance issues, as reflected in media coverage and surveys, is strongly associated with investor voting, particularly mutual fund voting.

JEL-codes: G32 G34 G38 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-cdm and nep-pol
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2014-12

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