Does shareholder proxy access improve firm value?
Subtitle: evidence from the Business Roundtable Challenge
By: Bo Becker, Daniel Bergstresser, Guhan Subramanian
Contributors: Bergstresser, Daniel; Subramanian, Guhan; Harvard Business School
Series: Working paper / Harvard Business School -- 11-052; Working paper (Harvard Business School) -- 11-052.
Publisher: Harvard Business School
Published: 2010
Place of publication: [Boston]
Language: eng
Number of pages: 43
Description: 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.
Notes: "November 2010"--Publisher's website.

Includes bibliographical references.