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Management Always Wins the Close Ones


  • Yair Listokin


While much has been made of "shareholder democracy" as a lever of corporate governance, there is little evidence about the efficacy of voting. This paper empirically examines votes on management-sponsored resolutions and finds widespread irregularities in the distribution of votes received by management. Management is overwhelmingly more likely to win votes by a small margin than lose by a small margin. The results indicate that, at some point in the voting process, management obtains highly accurate information about the likely voting outcome and, based on that information, acts to influence the vote. The precise point at which this occurs is unclear, though it is likely to be near the "poll-closing" time. Whatever the cause of management's advantage, it is clear that shareholder voting does not constitute a "representative" direct democracy. Copyright 2008, Oxford University Press.

Suggested Citation

  • Yair Listokin, 2008. "Management Always Wins the Close Ones," American Law and Economics Review, Oxford University Press, vol. 10(2), pages 159-184.
  • Handle: RePEc:oup:amlawe:v:10:y:2008:i:2:p:159-184

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    1. repec:oup:revfin:v:21:y:2017:i:1:p:7-31. is not listed on IDEAS
    2. Cu�at, Vicente & Gine, Mireia & Guadalupe, Maria, 2017. "Price and Probability: Decomposing the Takeover Effects of Anti-Takeover Provisions," CEPR Discussion Papers 12059, C.E.P.R. Discussion Papers.
    3. Anand, Anita & Dathan, Michele, 2017. "An empirical analysis of advance notice provisions in corporate bylaws: Evidence from Canada," International Review of Law and Economics, Elsevier, vol. 49(C), pages 41-56.
    4. Armstrong, Christopher S. & Gow, Ian D. & Larcker, David F., 2012. "The Efficacy of Shareholder Voting: Evidence from Equity Compensation Plans," Research Papers 2097, Stanford University, Graduate School of Business.
    5. repec:bla:stratm:v:38:y:2017:i:9:p:1827-1847 is not listed on IDEAS
    6. Steve Sauerwald & J. (Hans) Van Oosterhout & Marc Van Essen, 2016. "Expressive Shareholder Democracy: A Multilevel Study of Shareholder Dissent in 15 Western European Countries," Journal of Management Studies, Wiley Blackwell, vol. 53(4), pages 520-551, June.

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