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Sylvain Bourjade, Crina Pungulescu and David Stolin
''Voting against absent directors''
( 2016, Vol. 36 No.2 )
Director elections are a key corporate governance mechanism, and attendance of board meetings is typically the only observable measure of individual director effort. However, little is known is about shareholder voting response to director absences. Using data on large UK public companies, we report that shareholder opposition to directors is 1) highly convex in the proportion of meetings they missed in the preceding fiscal year, and 2) unaffected by director absences in the fiscal year before, in spite of 3) absenteeism being persistent from one year to the next. We raise questions about the optimality of investor decision-making in the proxy voting process and draw parallels to the literature on investor reaction to fund performance.
Keywords: corporate governance, board meeting attendance, director re-election, proxy voting
JEL: G3 - Corporate Finance and Governance: General
G2 - Financial Institutions and Services: General
Manuscript Received : Dec 23 2015 Manuscript Accepted : May 18 2016

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