What I Like About You: A Multilevel Study of Shareholder Discontent with Director Monitoring

• 成果类型: Article
• 署名作者: Hillman, Amy J.; Shropshire, Christine; Certo, S. Trevis; Dalton, Dan R.; Dalton, Catherine M.
• 署名单位: Arizona State University; Arizona State University-Tempe; University System of Georgia; University of Georgia; Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: ORGANIZATION SCIENCE
• ISSN/ISSBN: 1047-7039
• DOI: 10.1287/orsc.1100.0542
• 发表日期: 2011
• 页码: 675-687
• 关键词: Boards of directors; monitoring; SHAREHOLDERS

摘要

Each year shareholders, via exercise of their proxy votes, have the opportunity to voice their support or displeasure with firms and director nominees. Examining over 2,000 Fortune 500 director nominees, we explore those indicators available to shareholders at the time of directors' (re) election to provide insight into shareholder discontent with director monitoring. By studying actual voting behaviors, we provide new perspective to understanding director elections as a governance process. Employing a multilevel approach, we find support for agency-theoretic relationships between several firm and director characteristics and shareholder opposition to directors seeking (re) election to the board. At the firm level, we find that CEO compensation level and board size are positively related to the withholding of shareholder votes in director elections, a behavior indicative of shareholder discontent. Complementing these findings, at the director level, we find that affiliated director status, tenure, and number of outside directorships are positively related, and director block ownership is negatively related to shareholder discontent with director monitoring.