Does shareholder proxy access improve firm value
by Bo Becker
Published
2010
Publisher
Harvard Law School
Description
"Abstract: We measure the value of shareholder proxy access by using a recent development in the ability of shareholders to nominate candidates for board seats. We use the SEC's October 4, 2010 announcement that it would significantly delay implementation of its August 2010 proxy access rule as a natural experiment. Because firms with substantial institutional ownership would have been most affected by the SEC's now-delayed changes, we use the share and composition of institutional investors to sort firms into those more and less affected by the October 4 news. Firms that would have been most affected by proxy access, as measured by institutional ownership, lost value on that day. The value drop was 55 basis points for a 10 percentage point change in activist institution ownership. These results suggest that financial markets placed a positive value on shareholder access, as implemented in the SEC's August 2010 Rule"--John M. Olin Center for Law, Economics, and Business web site.
Subjects
Investor Relations
Investor Engagement
A History of corporate governance 1602-2002
When the wolves bite
Financial and corporate public relations
Corporate governance and initial public offerings
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