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The elimination of broker voting in director elections

Author

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  • Akyol, Ali C.
  • Raff, Konrad
  • Verwijmeren, Patrick

Abstract

In 2009, the Securities and Exchange Commission (SEC) reformed shareholder voting by eliminating uninstructed broker voting in director elections. We use this reform as a quasi-natural experiment to assess the value of shareholder empowerment. Using different control groups and various cross-sectional tests, we find that the reform did not increase average equity values.

Suggested Citation

  • Akyol, Ali C. & Raff, Konrad & Verwijmeren, Patrick, 2017. "The elimination of broker voting in director elections," Finance Research Letters, Elsevier, vol. 21(C), pages 34-39.
    • Handle: RePEc:eee:finlet:v:21:y:2017:i:c:p:34-39
    DOI: 10.1016/j.frl.2017.02.001
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    References listed on IDEAS

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    1. Jonathan B. Cohn & Stuart L. Gillan & Jay C. Hartzell, 2016. "On Enhancing Shareholder Control: A (Dodd-) Frank Assessment of Proxy Access," Journal of Finance, American Finance Association, vol. 71(4), pages 1623-1668, August.
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    7. Akyol, Ali C. & Lim, Wei Fen & Verwijmeren, Patrick, 2012. "Shareholders in the Boardroom: Wealth Effects of the SEC’s Proposal to Facilitate Director Nominations," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 47(5), pages 1029-1057, October.
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    Cited by:

    1. Anne-Marie Anderson & Nandu Nayar, 2022. "Can regulation enhancing the shareholder franchise increase firm value?," Journal of Regulatory Economics, Springer, vol. 61(3), pages 191-221, June.
    2. Choonsik Lee & Matthew E. Souther, 2020. "Managerial Reliance on the Retail Shareholder Vote: Evidence from Proxy Delivery Methods," Management Science, INFORMS, vol. 66(4), pages 1717-1736, April.

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    More about this item

    Keywords

    Shareholder voting; Director elections; Securities and Exchange Commission; Board effectiveness;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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