The following post comes to us from Peter Iliev of the Finance Department at Penn State University; Karl Lins of the Finance Department at the University of Utah; Darius Miller, Professor of Finance at Southern Methodist University; and Lukas Roth of the Finance Department at the University of Alberta.
In the paper, Shareholder Voting and Corporate Governance around the World, which was recently made publicly available on SSRN, we study the votes cast by U.S. institutional investors in elections to assess the impact of internal (firm-level) and external (country-level) corporate governance on shareholder voting patterns. The right to vote is arguably the most fundamental tool behind shareholder corporate governance. The impact of shareholder voting can potentially be much greater outside of the U.S. as such firms face a far greater range of shareholder protection and corporate disclosure which makes the proper exercise of corporate governance by shareholders both more difficult and more important. Nonetheless, academic research has largely ignored this form of governance for firms outside of the U.S.