Does Shareholder Proxy Access Improve Firm Value? Evidence From The Business Roundtable Challenge
The author measures the value of shareholder proxy access by using a recent development in the ability of shareholders to nominate candidates for board seats. They use the SEC's October 4, 2010 announcement that it would significantly delay implementation of its August 2010 proxy access rule as a natural experiment. Because firms with substantial institutional ownership would have been most affected by the SEC's now-delayed changes, they use the share and composition of institutional investors to sort firms into those more and less affected by the October 4 news.