Proxy Rules and Proxy Practices: An Empirical Study of US and UK Shareholder Proposals

Buchanan, Bonnie; Netter, Jeffry M.; Yang, Tina

doi:10.2139/ssrn.1474062

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Proxy Rules and Proxy Practices: An Empirical Study of US and UK Shareholder Proposals

68 Pages Posted: 2 Oct 2009 Last revised: 3 Oct 2015

See all articles by Bonnie Buchanan

Jeffry M. Netter

Department of Finance; University of Georgia Law School

Tina Yang

University of South Florida - Muma College of Business; European Corporate Governance Institute (ECGI)

There are 2 versions of this paper

Date Written: September 15, 2009

Abstract

In May 2009, the SEC proposed the most significant amendments to proxy rules since 1942. We build comprehensive samples of US and UK shareholder proposals for the period 2000-2006 to study the relation between proxy rules and proxy practices and the effect of shareholder proposals on firm performance. We find that, despite perceived negligible power, US shareholder proposals have more significant and positive impact on firms than UK ones, which have greater legal power to effect changes. US shareholder proposals have a significant impact on long-term stock performance, CEO turnover and board structure.

Keywords: Shareholder proposal, shareholder activism, proxy voting, proxy reform, corporate governance

JEL Classification: G32, G34, K22

Suggested Citation: Suggested Citation

Buchanan, Bonnie and Netter, Jeffry M. and Yang, Tina, Proxy Rules and Proxy Practices: An Empirical Study of US and UK Shareholder Proposals (September 15, 2009). Available at SSRN: https://ssrn.com/abstract=1474062 or http://dx.doi.org/10.2139/ssrn.1474062