Behind the Scenes: The Corporate Governance Preferences of Institutional Investors

Journal of Finance

Volumn 71, Issue 6, 2016, Pages 2905-2932

  McCahery, Joseph A ^a   Sautner, Zacharias ^a   Starks, Laura T ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84995699545     PISSN: 00221082     EISSN: 15406261     Source Type: Journal    
DOI: 10.1111/jofi.12393     Document Type: Article

References (66)

1. Admati, Anat, and Paul Pfleiderer, 2009, The “Wall Street Walk” and shareholder activism: Exit as a form of voice, Review of Financial Studies 22, 2245–2485.
2. Admati, Anat, Paul Pfleiderer, and Josef Zechner, 1994, Large shareholder activism and financial market equilibrium, Journal of Political Economy 102, 1097–1130.doi/10.1086/261965
3. Aggarwal, Reena, Isil Erel, and Laura Starks, 2015, Influence of public opinion on investor voting and proxy advisors, Working paper, University of Texas at Austin.
4. Alexander, Cindy, Mark Chen, Duane Seppi, and Chester Spatt, 2010, Interim news and the role of proxy voting advice, Review of Financial Studies 23, 4419–4454.doi/10.1093/rfs/hhq111
5. Back, Kerry, Tao Li, and Alexander Ljungqvist, 2014, Liquidity and governance, Working paper, NYU Stern.
6. Bebchuk, Lucian, Alon Brav, and Wei Jiang, 2015, The long-term effects of hedge fund activism, Columbia Law Review 115, 1085–1156.
7. Becht, Marco, Julian Franks, Colin Mayer, and Stefano Rossi, 2009, Returns to shareholder activism: Evidence from a clinical study of the Hermes UK Focus Fund, Review of Financial Studies 22, 3093–3129.doi/10.1093/rfs/hhn054
8. Bhide, Amar, 1993, The hidden costs of stock market liquidity, Journal of Financial Economics 34, 31–51.doi/10.1016/0304-405X(93)90039-E
9. Black, Bernard, 1990, Shareholder passivity reexamined, Michigan Law Review 89, 520–608.doi/10.2307/1289384
10. Bolton, Patrick, and Ernst-Ludwig vonThadden, 1998, Blocks, liquidity, and corporate control, Journal of Finance 53, 1–25.doi/10.1111/0022-1082.15240
11. Bratton, William, and Michael Wachter, 2010, The case against shareholder empowerment, University of Pennsylvania Law Review 158, 653–728.
12. Brav, Alon, John Graham, Campbell Harvey, and Roni Michaely, 2008, Managerial response to the May 2003 dividend tax cut, Financial Management 27, 611–624.
13. Brav, Alon, Wei Jiang, and Hyunseob Kim, 2010, Hedge fund activism: A review, Foundations and Trends in Finance 4, 185–246.doi/10.1561/0500000026
14. Brav, Alon, Wei Jiang, and Hyunseob Kim, 2015, The real effects of hedge fund activism: Productivity, asset allocation, and labor outcomes, Review of Financial Studies 28, 2723–2769.
15. Brav, Alon, Wei Jiang, Song Ma, and Xuan Tian, 2014, How does hedge fund activism reshape corporate innovation?, Working paper, Duke University.
16. Brav, Alon, Wei Jiang, Frank Partnoy, and Randall Thomas, 2008, Hedge fund activism, corporate governance, and firm performance, Journal of Finance 63, 1729–1775.doi/10.1111/j.1540-6261.2008.01373.x
17. Brickley, James, Ron Lease, and Clifford Smith, 1988, Ownership structure and voting on antitakeover amendments, Journal of Financial Economics 20, 267–292.doi/10.1016/0304-405X(88)90047-5
18. Burkart, Mike, Denis Gromb, and Fausto Panunzi, 1997, Large shareholders, monitoring, and the value of the firm, Quarterly Journal of Economics 112, 693–728.
19. Burr, Barry, 2012, Money managers increasing activism on governance—but quietly, Pensions and Investments. Available at: http://www.pionline.com/article/20120319/PRINT/303199980/money-managers-increasing-activism-on-governance-8212-but-quietly. Access Date: August 15, 2016.
20. Carleton, Willard, James Nelson, and Michael Weisbach, 1998, The influence of institutions on corporate governance through private negotiations: Evidence from TIAA-CREF, Journal of Finance 53, 1335–1362.doi/10.1111/0022-1082.00055
21. Chen, Xia, Jarrod Harford, and Kai Li, 2007, Monitoring: Which institutions matter? Journal of Financial Economics 86, 279–305.doi/10.1016/j.jfineco.2006.09.005
22. Choi, Stephen, 2000, Proxy issue proposals: Impact of the 1992 SEC proxy reforms, Journal of Law, Economics, & Organization 16, 233–268.doi/10.1093/jleo/16.1.233
23. Coffee, John C., 1991, Liquidity versus control: The institutional investor as corporate monitor, Columbia Law Review 91, 1277–1368.doi/10.2307/1123064
24. Collin-Dufresne, Pierre, and Vyacheslav Fos, 2015, Do prices reveal the presence of informed trading? Journal of Finance 70, 1555–1582.doi/10.1111/jofi.12260
25. Cornelli, Francesca, Zbigniew Kominek, and Alexander Ljungqvist, 2013, Monitoring managers: Does it matter? Journal of Finance 68, 431–481.doi/10.1111/jofi.12004
26. Cvijanovic, Dragana, Amil Dasgupta, and Konstantinos Zachariadis, 2016, Ties that bind: How business connections affect mutual fund activism, Journal of Finance DOI: 10.1111/jofi.12425.
27. Dasgupta, Amil, and Giorgia Piacentino, 2015, The Wall Street Walk when blockholders compete for flows, Journal of Finance 70, 2853–2896.
28. Davis, Gerald, and E. Han Kim, 2007, Business ties and proxy voting by mutual funds, Journal of Financial Economics 85, 552–570.doi/10.1016/j.jfineco.2005.04.003
29. Dichev, Ilia, John Graham, Campbell Harvey, and Shiva Rajgopal, 2013, Earnings quality: Evidence from the field, Journal of Accounting and Economics 56, 1–33.doi/10.1016/j.jacceco.2013.05.004
30. Dimmock, Stephen, William Gerken, Zoran Ivkovich, and Scott Weisbenner, 2015, Capital gains lock-in and governance choices, Working paper, University of Illinois at Urbana-Champaign.
31. Dimson, Elroy, Oguzhan Karakas, and Xi Li, 2015, Active ownership, Review of Financial Studies 28, 3225–3268.
32. Duan, Ying, Edith Hotchkiss, and Yawen Jiao, 2014, Business ties and information advantage: Evidence from mutual fund trading, Working paper, Boston College.
33. Edmans, Alex, 2009, Blockholder trading, market efficiency, and managerial myopia, Journal of Finance 22, 4881–4917.
34. Edmans, Alex, 2014, Blockholders and corporate governance, Annual Review of Financial Economics 6, 23–50.doi/10.1146/annurev-financial-110613-034455
35. Edmans, Alex, Vivian Fang, and Emanuel Zur, 2013, The effect of liquidity on governance, Review of Financial Studies 26, 1443–1482.doi/10.1093/rfs/hht012
36. Edmans, Alex, and Gustavo Manso, 2011, Governance through trading and intervention: A theory of multiple blockholders, Review of Financial Studies 24, 2395–2428.doi/10.1093/rfs/hhq145
37. Ertimur, Yonca, Fabrizio Ferri, and David Oesch, 2013, Shareholder votes and proxy advisors: Evidence from say on pay, Journal of Accounting Research 51, 951–996.doi/10.1111/1475-679X.12024
38. European Commission, 2011, Green paper: The EU corporate governance framework, Brussels.
39. Faure-Grimaud, Antoine, and Denis Gromb, 2004, Public trading and private incentives, Review of Financial Studies 17, 985–1014.doi/10.1093/rfs/hhh002
40. Gallagher, Daniel, 2013, Remarks at Society of Corporate Secretaries & Governance Professionals, 67th National Conference, Seattle, Washington. Available at: http://www.sec.gov/News/Speech/Detail/Speech/1370539700301#.U4xO4dy4nlI. Access Date: August 15, 2016.
41. Gantchev, Nickolay, 2013, The costs of shareholder activism: Evidence from a sequential decision model, Journal of Financial Economics 107, 610–631.doi/10.1016/j.jfineco.2012.09.007
42. Gantchev, Nickolay, Oleg Gredil, and Chotibhak Jotikasthira, 2015, Governance under the gun: Spillover effects of hedge fund activism, Working paper, University of North Carolina.
43. Gaspar, Jose Miguel, Massimo Massa, and Pedro Matos, 2005, Shareholder investment horizons and the market for corporate control, Journal of Financial Economics 76, 135–165.doi/10.1016/j.jfineco.2004.10.002
44. Gillan, Stuart, and Laura Starks, 2000, Corporate governance proposals and shareholder activism: The role of institutional investors, Journal of Financial Economics 57, 275–305.doi/10.1016/S0304-405X(00)00058-1
45. Gillan, Stuart, and Laura Starks, 2007, The evolution of shareholder activism in the United States, Journal of Applied Corporate Finance 19, 55–73.doi/10.1111/j.1745-6622.2007.00125.x
46. Gordon, Jeffrey, 2009, “Say on pay”: Cautionary notes on the U.K. experience and the case for shareholders opt-in, Harvard Journal on Legislation 46, 323–364.
47. Grossman, Sanford, and Oliver Hart, 1980, Takeover bids, the free-rider problem, and the theory of the corporation, Bell Journal of Economics 11, 42–64.doi/10.2307/3003400
48. Hirschman, Albert, 1970, Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations, and States (Harvard University Press, Cambridge, MA).
49. Huddart, Steven, 1993, The effect of a large shareholder on corporate value, Management Science 39, 1407–1421.doi/10.1287/mnsc.39.11.1407
50. Iliev, Peter, Karl Lins, Darius Miller, and Lukas Roth, 2015, Shareholder voting and corporate governance around the world, Review of Financial Studies 28, 2167–2202.
51. Iliev, Peter, and Michelle Lowry, 2015, Are mutual funds active voters? Review of Financial Studies 28, 446–485.doi/10.1093/rfs/hhu062
52. Jin, Li, 2006, Capital gains tax overhang and price pressure, Journal of Finance 61, 1399–1431.doi/10.1111/j.1540-6261.2006.00876.x
53. Kahn, Charles, and Andrew Winton, 1998, Ownership structure, speculation, and shareholder intervention, Journal of Finance 53, 99–129.doi/10.1111/0022-1082.45483
54. Karpoff, Jonathan, Paul Malatesta, and Ralph Walkling, 1996, Corporate governance and shareholder initiatives: Empirical evidence, Journal of Financial Economics 42, 365–395.doi/10.1016/0304-405X(96)00883-5
55. Larcker, David, Allan L. McCall, and Gaizka Ormazabal, 2014, Outsourcing shareholder voting to proxy advisory firms, Working paper, Stanford University.
56. Leuz, Christian, Karl Lins, and Frank Warnock, 2009, Do foreigners invest less in poorly governed firms? Review of Financial Studies 22, 3245–3285.doi/10.1093/rfs/hhn089
57. Levit, Doron, 2014, Soft shareholder activism, Working paper, Wharton School.
58. Li, Tao, 2014, Outsourcing corporate governance: Conflicts of interest and competition in the proxy advisory industry, Working paper, University of Warwick.
59. Maug, Ernst, 1998, Large shareholders and monitors: Is there a trade-off between liquidity and control? Journal of Finance 53, 65–98.doi/10.1111/0022-1082.35053
60. Noe, Thomas, 2002, Investor activism and financial market structure, Review of Financial Studies 15, 289–318.doi/10.1093/rfs/15.1.289
61. Parrino, Robert, Richard Sias, and Laura Starks, 2003, Voting with their feet: Institutional ownership changes around CEO turnovers, Journal of Financial Economics 68, 3–46.doi/10.1016/S0304-405X(02)00247-7
62. Shleifer, Andrei, and Robert Vishny, 1986, Large shareholders and corporate control, Journal of Political Economy 94, 461–488.doi/10.1086/261385
63. Smith, Michael, 1996, Shareholder activism by institutional investors: Evidence from CalPERS, Journal of Finance 51, 227–252.doi/10.1111/j.1540-6261.1996.tb05208.x
64. Towers Watson, 2013, The World's 500 largest asset managers, Industry Study. Available at: https://www.towerswatson.com/en/Insights/IC-Types/Survey-Research-Results/2013/11/The-Worlds-500-Largest-Asset-Managers-Year-end-2012. Access Date: August 15, 2016.
65. Winton, Andrew, 1993, Limitation of liability and the ownership structure of the firm, Journal of Finance 48, 487–512.doi/10.1111/j.1540-6261.1993.tb04724.x
66. Yermack, David, 2010, Shareholder voting and corporate governance, Annual Review of Financial Economics 2, 103–125.doi/10.1146/annurev-financial-073009-104034