Review of Finance Vol. 17 No. 2 2013
Institutional Investors as Minority Shareholders
Abstract
We examine the link between minority shareholders’ rights and corporate governance by studying institutional investors’ voting patterns in a concentrated ownership environment. Institutions rarely vote against insider-sponsored proposals even when the law empowers the minority. Institutions vote against compensation-related proposals more often than against related party transactions even when minority shareholders cannot influence outcomes. Potentially conflicted institutions are more likely to vote for insiders’ proposals than stand-alone investors, regardless of their effect on outcomes. A plausible conclusion is that empowering minority shareholders affects the selection of proposals but not actual voting; another is that empowering minority shareholders is ineffective without addressing conflicts of interest.
- DOI
- 10.1093/rof/rfr039
- Volume
- 17
- Issue
- 2
- Pages
- 691-725
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref