Retail shareholder participation in the proxy process: Monitoring, engagement, and voting

Brav, Alon; Cain, Matthew D.; Zytnick, Jonathon

doi:10.1016/j.jfineco.2021.07.013

Cited by 50 publications

(18 citation statements)

References 48 publications

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“…Without shareholders' engagement, a company cannot operate well. In fact, CSR towards shareholders is vital in a business-if a company does not take on the responsibility, it may struggle with financial issues [50]. CSR towards shareholders can be considered as an enterprise investing the capital of shareholders properly.…”

Section: Csr Towards Shareholdersmentioning

confidence: 99%

Consumers’ Perspectives and Behaviors towards Corporate Social Responsibility—A Cross-Cultural Study

Hsu

Bui

2022

Sustainability

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This study measured consumers’ perspectives and behaviors with respect to corporate social responsibility (CSR). Specifically, we explored the components of CSR, including CSR aimed towards the environment, society, customers, employees, suppliers, and shareholders. We also examined the impact of CSR practices on brand attitude and purchase intention. The study surveyed 616 consumers across three locations, with detailed questionnaires in four languages. A total of 564 samples (186 from Vietnam, 189 from Indonesia, and 189 from Taiwan) qualified for data analysis. Additionally, statistics software including LISREL 8.8, STATISTICA 10, and MINITAB 19 were utilized to evaluate our hypotheses and construct a structural model. The results indicated that the consumers across the three areas were not concerned about CSR aimed towards shareholders, while all consumers considered CSR aimed towards themselves. Vietnamese customers prioritized a company’s care for its employees, while both Indonesian and Taiwanese consumers concentrated on the environment and society. In addition, suppliers’ benefits and rights attracted Indonesians’ attention. Furthermore, CSR had a positive significant impact on brand reputation in all three cultures. However, while CSR had a positive influence on customer purchase intention in Indonesia and Taiwan, it did not in Vietnam.

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Section: Csr Towards Shareholdersmentioning

confidence: 99%

Consumers’ Perspectives and Behaviors towards Corporate Social Responsibility—A Cross-Cultural Study

Hsu

Bui

2022

Sustainability

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“…Empirical evidence regarding the active or inactive nature of retail investors in proxy voting is very limited in the literature. Related to our study, Brav et al (2021) utilize detailed US retail shareholding data from 2015 to 2017 to show that retail investors can and do participate in the voting process when monitoring is needed. Specifically, participation by these individuals increases with their stake in firm ownership and during special meetings (e.g., circumstantially beneficial to vote).…”

Section: Discussionmentioning

confidence: 99%

“…We pay greater attention to retail investors' attention (e.g., information-seeking through the internet) during the specific event in a proxy fight-the shareholder activism process. This is particularly worth noting due to the positive association between the number of retail investors and firm size as documented by Brav et al (2021). To the extent that e-information is relatively more abundant, especially about larger firms in the digital age, it is particularly useful to look at the information-seeking process among general and less resourceful retail investors during shareholder activism events.…”

Section: Discussionmentioning

confidence: 99%

Are retail investors really passive? Shareholder activism in the digital age

Hafeez

Kabir

Wongchoti

2021

Business Fin & Account

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Academics traditionally view retail investors as rationally passive toward corporate proxy fights due to the higher cost of individual information gathering and their inability to coordinate collectively. In the wake of the digital age and social media, we re-examine retail investors' attention and participation during the shareholder activism process. Using a sample from 2005 to 2016, we find that abnormal Google search activities (a proxy for retail investors' attention in the literature) on firms that receive a shareholder proposal increase during the 3-week period leading up to the voting. This increase is more pronounced for less transparent firms. Our textual analyses of proxy statements also indicate that these abnormal Google search activities particularly increase for proposals with a more negative or controversial tone. In turn, this retail investors' attention is associated with greater participation in the voting process, especially among proposals that resonate with shareholders' preferences and interests (high salience activism). Finally, we show that greater participation during high salience activism is more prominent after E-proxy regulation became fully effective in 2009. By highlighting that retail investors are proactively engaged in "informed" voting during the shareholder activism process, our study further challenges the view that retail investors are narratively passive.

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“…EU policy emphasis remains mostly on promoting retail participation in the capital markets via pooled products: European Commission (2021a). 15 32% compared to 80% according to a recent study of US retail shareholder voting behaviour : Brav et al (2021). 16 Ibid.…”

Section: Retail Investors Wanting a 'Say'mentioning

confidence: 99%

Shareholder Engagement and Custody Chains

Ferran

2022

Eur Bus Org Law Rev

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Shareholder engagement has come to be seen to be pivotal to good corporate governance. It is therefore more important than ever for the mechanisms of shareholder engagement to be up to the important task they are meant to perform. Historically, these mechanisms have fallen short because of the capital markets’ necessary dependency on custody chains. Custody chains perform valuable functions but they also create a distance between the company and the end investor from which flows a significant risk of voting preferences and other important information not passing smoothly up and down the chain. Corporate governance is thus at risk of being distorted by process deficiencies. Changes to the operation of custody chains that were introduced by the EU’s flagship amended Shareholder Rights Directive II became operative in September 2020. This article is therefore among the first to draw on operational impact to assess the significance of these new measures. Experience has already demonstrated that while there have been some important advances, the regulatory changes are struggling on two levels: they have created new uncertainties within national laws; and they have failed to provide the necessary cross-border harmonization of key concepts. These are not issues that can be resolved effectively by technology or market workarounds on their own. There is a continuing need for legislative change to ensure that legal uncertainties do not act as a barrier to further technology-driven market standardization and innovation.

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Retail shareholder participation in the proxy process: Monitoring, engagement, and voting

Cited by 50 publications

References 48 publications

Consumers’ Perspectives and Behaviors towards Corporate Social Responsibility—A Cross-Cultural Study

Consumers’ Perspectives and Behaviors towards Corporate Social Responsibility—A Cross-Cultural Study

Are retail investors really passive? Shareholder activism in the digital age

Shareholder Engagement and Custody Chains

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