Assessing Sustainability-Related Systematic Reputational Risk through Voting Results in Corporate Meetings: A Cross-Industry Analysis

Marcos Vizcaíno-González, Susana Iglesias-Antelo and Noelia Romero-Castro
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Susana Iglesias-Antelo: Department of Business, Universidade da Coruña, 15071 A Coruña, Spain
Noelia Romero-Castro: Department of Financial Economics and Accounting, Universidade de Santiago de Compostela, 15782 Santiago de Compostela, Spain

Sustainability, 2019, vol. 11, issue 5, 1-11

Abstract: This research uses Sharpe’s single-index model to analyze voting results in corporate meetings, thus assessing whether voting results at the corporate level are influenced by aggregated voting results at the industry level. We use a sample of votes regarding managerial proposals concerning executive election and compensation. The companies involved are included in the five most represented industries in NASDAQ, and the analysis focuses on the 2003–2017 period. The votes were disclosed by institutional investors who are especially concerned with corporate governance and sustainability issues, so we consider that they reflect sustainability-driven decisions. Based on previous research linking voting results to reputational consequences, we assess the systematic component of sustainability-related reputational risk within these five industries, finding significant differences among them. Thus, although the systematic component of sustainability-related reputational risk appears to be strong for financial and technological companies, it is weak for healthcare, consumer services, and capital goods companies. Implications for researchers and practitioners are reported.

Keywords: single-index model; sustainability-related risk; systematic risk; reputational risk (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
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