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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | When do proxy advisors improve corporate decisions? |
| Organization Unit | |
| Authors |
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| Language |
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| Institution | University of Zurich |
| Series Name | Swiss Finance Institute Research Paper |
| Number | 22-47 |
| Date | 2023 |
| Abstract Text | There is an ongoing debate about how proxy advisory firms affect corporate decisions. A major concern is that shareholders seeking to save costs use a proxyadvisor’s voter ecommendation as substitute for own research, thereby reducing efficiency of shareholder decision-making. We show that the opposite effect - complementarity between a proxyadvisor’s recommendation and shareholders’ research effort - occurs if two conditions are met: (i) the board o fdirectors is sufficiently well informed; and (ii) shareholders can condition their investment in research on the proxyadvisor’s recommendation. Insum, a profit-maximizing proxyadvisor can improve corporate decisionmaking by stimulating shareholders’ research through its own. |
| Free access at | Official URL |
| Other Identification Number | merlin-id:21040 |
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