Cyber democracy for better board representation? The effect of e-voting on excess control in an emerging economy

Kuo-Pin Yang, Christine Chou and Gavin M Schwarz
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Christine Chou: Department of International Business, National Dong Hwa University, Hualien
Gavin M Schwarz: School of Management, UNSW Business School, University of New South Wales, Sydney, NSW, Australia

Australian Journal of Management, 2021, vol. 46, issue 4, 761-786

Abstract: With a growth in shareholder activism, the influence of shareholders on the make-up and selection of board members is increasingly acknowledged but under-explored. Focusing on one element of activism, this article considers the adoption and use of electronic voting (e-voting) for board elections in emerging economies, testing its effect on the excess control of controlling shareholders. Using a sample of board elections at 809 publicly listed Taiwanese companies, results challenge convention on governance and shareholder democracy. We show that adopting e-voting counterintuitively leads to greater levels of excess control which subsequently harms firm performance—an effect more pronounced in firms characterized by a pyramidal control structure and family-controlled firms. Findings offer an alternative view on shareholder democracy, revisiting expectations of benefits accrued from e-voting. JEL Classification: M10, L21, L25

Keywords: Activism; board composition; corporate governance; emerging economy; e-voting; excess control; shareholder democracy (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:46:y:2021:i:4:p:761-786

DOI: 10.1177/0312896220983592

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