The Elimination of Broker Voting in Director Elections

Ali Akyol, Konrad Raff and Patrick Verwijmeren
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Ali Akyol: University of Melbourne
Konrad Raff: VU University Amsterdam
Patrick Verwijmeren: VU University Amsterdam, Duisenberg school of finance, and University of Glasgow

Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: After pressure from shareholder activists, proxy advisory firms, and the New York Stock Exchange, the Securities and Exchange Commission has eliminated uninstructed broker voting in director elections. We observe that average director approval rates remain high after the change in regulation, while the probability of a director being voted off the board remains low. In addition, we find no evidence of significant wealth effects of the change in regulation. We do find that firms are increasingly letting shareholders ratify their auditors after the change in regulation, which helps in establishing a quorum.

Keywords: Broker voting; shareholder empowerment; Securities and Exchange Commission; board effectiveness (search for similar items in EconPapers)
JEL-codes: G34 G38 (search for similar items in EconPapers)
Date: 2012-09-14
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20120094

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