What Does it Mean When Shareholder Proposals are Withdrawn? – Corporate Governance

Companies constantly take full credit for corporate governance reforms, such as the addition of proxy access bylaws, when they are doing so only to avoid a vote on a more robust shareholder proposal.

Faced with a shareholder proposal that is likely to win or result in negative publicity if opposed, boards frequently negotiate for a withdrawal. The resulting agreement is often a ‘lite’ version of the shareholder proposal but frequently represents a progressive reform nonetheless.

This study, by researchers Rob Bauer, Frank Moers, and Michael Viehs, provides strong evidence that the effectiveness of shareholders cannot be adequately measured based only on pass/fail rates of shareholder proposals going to a vote.

via Who Withdraws Shareholder Proposals? – Corporate Governance.

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