Behind the Scenes: The Corporate Governance Preferences of Institutional Investors
Open accessAbstract
We survey institutional investors to better understand their role in the corporate governance of firms. Consistent with a number of theories, we document widespread behind‐the‐scenes intervention as well as governance‐motivated exit. These governance mechanisms are viewed as complementary devices, with intervention typically occurring prior to a potential exit. We further find that long‐term investors and investors that are less concerned about stock liquidity intervene more intensively. Finally, we find that most investors use proxy advisors and believe that the information provided by such advisors improves their own voting decisions.
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The widespread use of private investor intervention regarding climate topics supports the interpretation that many investors first engage firms through negotiations and take public actions only once the private interventions fail.
“The widespread use of private investor intervention regarding climate topics supports the interpretation from their article that many investors first engage firms through negotiations and take public actions only once the private interventions fail.”
From The Importance of Climate Risks for Institutional Investors (2020) · cites this paper as McCahery, Sautner, and Starks (2016)
Cites
La Porta, R., Lopez‐de‐Silanes, F., Shleifer, A., & Vishny, R. W. (1998) · Journal of Political Economy · doi:10.1086/250042 · Cited by 18,025 · see citing works
Dimson, E., Karakaş, O., & Li, X. (2015) · Review of Financial Studies · doi:10.1093/rfs/hhv044 · Cited by 1,242 · see citing works
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The Importance of Climate Risks for Institutional Investors
Krueger, P., Sautner, Z., & Starks, L. T. (2020) · The Review of Financial Studies · doi:10.1093/rfs/hhz137 · Cited by 3,034 · see citing works
Self-citationDo institutional investors drive corporate social responsibility? International evidence
Dyck, A., Lins, K. V., Roth, L., & Wagner, H. F. (2019) · Journal of Financial Economics · doi:10.1016/j.jfineco.2018.08.013 · Cited by 2,547 · see citing works
Dimson, E., Karakaş, O., & Li, X. (2015) · Review of Financial Studies · doi:10.1093/rfs/hhv044 · Cited by 1,242 · see citing works
Anticompetitive Effects of Common Ownership
AZAR, J., SCHMALZ, M. C., & TECU, I. (2018) · The Journal of Finance · doi:10.1111/jofi.12698 · Cited by 980 · see citing works
Presidential Address: Sustainable Finance and ESG Issues— <i>Value</i> versus <i>Values</i>
STARKS, L. T. (2023) · The Journal of Finance · doi:10.1111/jofi.13255 · Cited by 474 · see citing works
Self-citationDimson, E., Karakaş, O., & Li, X. (2018) · SSRN Electronic Journal · doi:10.2139/ssrn.3209072 · Cited by 70 · see citing works
- Authors
- McCAHERY, J. A., SAUTNER, Z., & STARKS, L. T.
- Affiliations
- Seoul National University (KR)
- Frankfurt University of Applied Sciences (DE)
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2016-11-10
- Volume
- 71
- Issue
- 6
- Pages
- 2905-2932
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W1949455802
- Cited by
- 1,494
- References
- 2
- Citations by year
- 2026: 135 · 2025: 180 · 2024: 148 · 2023: 191 · 2022: 147 · 2021: 128 · 2020: 125 · 2019: 138 · 2018: 94 · 2017: 70 · 2016: 43 · 2015: 17 · 2014: 20 · 2013: 20 · 2012: 17
- FWCI
- 420.16
- Type
- journal article
- Language
- en
- Open access
- green
- www.zora.uzh.ch
- Licence
- Locations
- The Journal of Finance (publishedVersion)
- Research portal (Tilburg University) (publishedVersion)
- Zurich Open Repository and Archive (University of Zurich) (acceptedVersion, other-oa)
- Tilburg University Research Portal (submittedVersion)
- Data Archiving and Networked Services (DANS) (submittedVersion)
- UvA-DARE (University of Amsterdam) (submittedVersion)
- Zurich Open Repository and Archive (University of Zurich) (submittedVersion, other-oa)
- Zurich Open Repository and Archive (University of Zurich)
- Topics
- Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Social Sciences › Business, Management and Accounting › Strategy and Management › Political Influence and Corporate Strategies
- Keywords
- institutional investors, corporate governance, proxy advisors, shareholder voting, long-term investors, stock liquidity
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