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Institutional shareholders, proxy advisor recommendation, and vote outcomes in shareholder meetings

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  • Dubois, Edouard
  • McGinty, Sean
  • Uchida, Konari
  • Chen, Yenn-Ru
  • Fu, Jyun-Ying

Abstract

Our investigations into the shareholder meetings of UK indexed companies indicate that vote outcomes become more sensitive to proxy advisor recommendations as ownership by well-diversified foreign institutions increases. Vote sensitivity is associated especially with ownership by well-diversified institutional investors that speak a different language. The results support the recent regulatory focus on proxy advisory firms and on how institutional investors manage their fiduciary duties. The findings are supported by firm*agenda fixed-effects models, matching analyses of director election, alternative definitions of portfolio diversification, and examination of specific countries’ institutions that reduce endogeneity biases. French and Japanese data also show qualitatively the same result.

Suggested Citation

  • Dubois, Edouard & McGinty, Sean & Uchida, Konari & Chen, Yenn-Ru & Fu, Jyun-Ying, 2023. "Institutional shareholders, proxy advisor recommendation, and vote outcomes in shareholder meetings," Research in International Business and Finance, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s0275531923001289
    DOI: 10.1016/j.ribaf.2023.102002
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    References listed on IDEAS

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    Cited by:

    1. Miyachi, Hiroaki & Takeda, Fumiko, 2024. "Empirical study on voting results and proxy advisor recommendations in Japan," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 92(C).

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