Retail Shareholder Participation in the Proxy Process: Monitoring, Engagement, and Voting

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

doi:10.2139/ssrn.3387659

Cited by 13 publications

(9 citation statements)

References 9 publications

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“…Interestingly, shareholders who intentionally ask for full packages of proxy materials are much more likely to vote than are those to whom the corporation chooses to send or not to send reference materials. This converges with observations by a few authors such as Tanaka (2015) and Brav et al (2019).…”

Section: Resultssupporting

confidence: 93%

“…None of the executives doubted this observation. In particular, we confirm the finding of Brav et al (2019) that retail shareholders tend to vote when they receive more information from the corporation about the agenda and the forthcoming resolutions.…”

Section: Resultssupporting

confidence: 85%

“…Indeed, as Hirschman’s (1970) seminal work, it is recognized that shareholders have a means for disciplining the management. These means can be summarized in the slogan “voice or exit.” The “exit” tactic consists of selling shares when shareholders are discontented with management; whereas the “voice” tactic implies that shareholders become involved in monitoring the management, and in particular activate their voting rights (Brav et al , 2019). For Brav et al (2019), with the multiplication of financial scandals around the world, commentators begin to call for shifting the focus from the “exit” to the “voice” channels (Chasan, 2013) and from monitoring by institutional investors to disciplining by retail shareholders (Saccone, 2010; Tanaka, 2015; Fisch, 2017).…”

Section: Literature Reviewmentioning

confidence: 99%

“…These means can be summarized in the slogan “voice or exit.” The “exit” tactic consists of selling shares when shareholders are discontented with management; whereas the “voice” tactic implies that shareholders become involved in monitoring the management, and in particular activate their voting rights (Brav et al , 2019). For Brav et al (2019), with the multiplication of financial scandals around the world, commentators begin to call for shifting the focus from the “exit” to the “voice” channels (Chasan, 2013) and from monitoring by institutional investors to disciplining by retail shareholders (Saccone, 2010; Tanaka, 2015; Fisch, 2017). Hence, the adoption of IV is likely to contribute to shifting to the “voice” approach and, in turn, to the progressive strengthening of participative democracy (Chadwick, 2003; Van der Krans, 2007; Chasan, 2013).…”

Section: Literature Reviewmentioning

confidence: 99%

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The effectiveness of e-corporate governance: an exploratory study of internet voting at shareholders’ annual meetings in France

Abdennadher

Cheffi

2020

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Purpose E-corporate governance or the use of technologies and information systems (ISs) in corporate governance, is still a subject that is too seldom addressed in business research. This paper is at the intersection between two fields of research (corporate governance and the management of ISs), which are interdependent in ways that are still unexplored. The paper analyzes the implications of internet voting (IV) at shareholders’ annual meetings (SAM) for the corporate governance of listed companies in France, in particular for the relationship between executives and shareholders. Most of the studies that have dealt with IV at SAM have focused on techno-legal issues and were often conducted by business law researchers. The purpose of this paper is to investigate the implications of the new voting system through the prism of corporate governance. Design/methodology/approach The authors proceeded by triangulation of methods. This qualitative study is based on observations, interviews and documentary analysis. It assessed the IV implications for both the issuing companies and the shareholders. Findings The new voting system brings undeniable competitive advantage to the issuing company and facilitates shareholders’ activism, yet it has serious risks both for the corporations and for certain categories of the shareholder. Interestingly, the authors propose an original and field-grounded typology that distinguishes the risks and benefits associated with IV in relation to executives’ attitudes. Social implications The paper shows that the resolving of identified deficiencies with IV development could contribute to the alignment of companies’ interests with those of shareholders. Moreover, the study calls for policymakers to appoint an official body to regulate the practical implementation of the new system and to prevent its dissemination being held hostage to the executives’ willingness. Originality/value An original aspect of this research lies in the effective operationalization of the constructs of corporate governance effectiveness with a view to examining corporate governance as a set of technologically mediated practices. Moreover, this study emphasizes the key role of the construct of “executives’ willingness” in facilitating/impeding IV diffusion. This underlies their attempts to reverse the corporate governance relationship.

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Section: Resultssupporting

confidence: 93%

Section: Resultssupporting

confidence: 85%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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The effectiveness of e-corporate governance: an exploratory study of internet voting at shareholders’ annual meetings in France

Abdennadher

Cheffi

2020

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“…By contrast, retail shareholders hold much fewer shares of a given …rm. Moreover, the dispersion of shareholdings among retail shareholders is substantial (Brav et al 2019). 2 In the 19th century most corporations used to restrict the voting power of any given shareholder; with many of them employing one-person-one-vote mechanisms (see, e.g., Hansmann and Pargendler 2013).…”

Section: Introductionmentioning

confidence: 99%

Voting in Shareholders Meetings

et al. 2021

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This paper studies the informational e¢ ciency of voting mechanisms in shareholder meetings. When the management cannot a¤ect the proposal being voted on, we show that voting mechanisms are more e¢ cient when their ballot space is richer. Moreover, e¢ ciency requires full divisibility of the votes. When the management has agenda power, we uncover a novel trade-o¤: more e¢ cient mechanisms provide worse incentives to select good proposals. This negative e¤ect can be large enough to wash out the higher voting e¢ ciency of even the most e¢ cient mechanisms.

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Feasibility and Exploratory Study of Implementing the Blockchain Technology in the UAE Financial Markets

Abdennadher,

Salem,

Alkaabi

et al. 2022

Contemporary Research in Accounting and Finance

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Retail Shareholder Participation in the Proxy Process: Monitoring, Engagement, and Voting

Cited by 13 publications

References 9 publications

The effectiveness of e-corporate governance: an exploratory study of internet voting at shareholders’ annual meetings in France

The effectiveness of e-corporate governance: an exploratory study of internet voting at shareholders’ annual meetings in France

Voting in Shareholders Meetings

Feasibility and Exploratory Study of Implementing the Blockchain Technology in the UAE Financial Markets

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