Does the director election system matter? Evidence from majority voting

详细信息    查看全文

• 作者：Yonca Ertimur ; Fabrizio Ferri ; David Oesch
• 关键词：Director elections ; Majority voting ; Shareholder activism ; Director turnover ; G30 ; G34 ; M51
• 刊名：Review of Accounting Studies
• 出版年：2015
• 出版时间：March 2015
• 年：2015
• 卷：20
• 期：1
• 页码：1-41
• 全文大小：564 KB
• 参考文献：1. Adams, R. B., & Ferreira, D. (2008). Do directors perform for pay? / Journal of Accounting and Economics, / 46, 154-71. CrossRef
  2. Agrawal, A. (2012). Corporate governance objectives of labor union shareholders. / Review of Financial Studies, / 25, 187-26. CrossRef
  3. Allen, C. H. (2007). Study of majority voting in director elections. Neal, Gerber & Eisenberger LLP. http://www.ngelaw.com/files/upload/majoritystudy111207.pdf.
  4. Armstrong, C., Gow, I. D., & Larcker, D. F. (2013). The efficacy of shareholder voting: Evidence from equity compensation plans. / Journal of Accounting Research, / 51, 909-50. CrossRef
  5. Bainbridge, S. (2005). The case for limited shareholder voting rights. / UCLA Law Review, / 53, 601-36.
  6. Bebchuk, L. A. (2003). The case for shareholder access to the ballot. / The Business Lawyer, / 59, 43-6.
  7. Bebchuk, L. A. (2007). The myth of the shareholder franchise. / Virginia Law Review, / 93, 675-32.
  8. Bebchuk, L. A., & Cohen, A. (2005). The costs of entrenched boards. / Journal of Financial Economics, / 78, 409-33. CrossRef
  9. Bebchuk, L. A., Cohen, A., & Ferrell, A. (2009). What matters in corporate governance? / Review of Financial Studies, / 22, 783-27. CrossRef
  10. Bebchuk, L. A., Cohen, A. & Wang, C. Y. (2011). / Staggered boards and wealth of shareholders: Evidence from two natural experiments. Working paper.
  11. Becker, B., Bergstresser, D. B., & Subramanian, G. (2013). Does shareholder proxy access improve firm value? evidence from the Business Roundtable’s Challenge. / Journal of Law and Economics, / 56, 127-60. CrossRef
  12. Brickley, J. A., Lease, R. C., & Smith, C. W. (1988). Ownership structure and voting on antitakeover amendments. / Journal of Financial Economics, / 20, 267-91. CrossRef
  13. Cai, J., Garner, J., & Walkling, R. A. (2009). Electing directors. / Journal of Finance, / 64, 2389-421. CrossRef
  14. Cai, J., Garner, J., & Walkling, R. A. (2013). Paper tiger? An empirical analysis of majority voting. / Journal of Corporate Finance, / 21, 119-35. CrossRef
  15. Cai, J., & Walkling, R. A. (2011). Shareholders-Say on pay: Does it create value? / Journal of Financial and Quantitative Analysis, / 46, 299-39. CrossRef
  16. Carhart, M. (1997). On persistence in mutual fund performance. / Journal of Finance, / 52, 57-2. CrossRef
  17. Cellini, S. R., Ferreira, F., & Rothstein, J. (2010). The value of school facility investments: Evidence from a dynamic regression discontinuity design. / Quarterly Journal of Economics, / 125, 215-61. CrossRef
  18. Cohen, A. & Wang, C.Y. (2013). How do staggered boards affect shareholder value? Evidence from a natural experiment. / Journal of Financial Economics (forthcoming).
  19. Cohn, J. B., Gillan, S. L. & Hartzell, J. C. (2011). / On the optimality of shareholder control: Evidence from the Dodd- / Frank Financial Reform Act. Working paper.
  20. Cremers, M. & Ferrell, A. (2013). Thirty years of shareholder rights and firm valuation. / Journal of Finance (forthcoming).
  21. Cremers, M., & Nair, V. (2005). Governance mechanisms and equity prices. / Journal of Finance, / 60, 2859-894. CrossRef
  22. Cu?at, V., Gine, M., & Guadalupe, M. (2012). The vote is cast: The e
• 刊物主题：Accounting/Auditing; Finance/Investment/Banking; Public Finance & Economics;
• 出版者：Springer US
• ISSN：1573-7136

文摘

We examine the effect of a change in the director election system—the switch from a plurality voting standard to a more stringent standard known as majority voting (MV). Using a regression discontinuity design, we document abnormal returns of 1.43-.60?% around annual meeting dates where shareholder proposals to adopt MV are voted upon, suggesting that shareholders perceive the adoption of MV as value-enhancing. We document an increase in boards-responsiveness to shareholders at MV firms. In particular, relative to a propensity score-matched control sample, firms adopting MV exhibit an increase in the rate of implementation of shareholder proposals supported by a majority vote and in the responsiveness to votes withheld from directors up for election. We do not find a relation between votes withheld and subsequent director turnover, regardless of the election standard. Overall, it appears that, rather than a channel to remove specific directors, director elections are viewed by shareholders as a means to obtain specific governance changes and that, in this respect, their ability to obtain such changes is stronger under a MV standard.