Doing the Right Thing? The Voting Power Effect and Institutional Shareholder Voting.

ABSTRACT: Through a combination of a controlled experiment and a survey, we examine the effect of voting power on shareholders' voting behavior at general meetings. To avoid a selection bias, common in archival voting data, we exogenously manipulate shareholders' power to affect the outcome. Our findings suggest that, when it comes to corporate decisions involving conflicts of interest, voting power nudges shareholders to oppose management and to choose the "right" alternative, that is, vote against a proposal which prima facie does not serve the company's best interest. This effect obtained even when the dissenting vote contravened the choices of all other voters. Furthermore, the drive "to do the right thing" was established as significant, above and beyond the size of the economic stake. W

SUBMITTER: Dressler E 

PROVIDER: S-EPMC9010709 | biostudies-literature | 2022 Apr

REPOSITORIES: biostudies-literature