Behind the scenes: The corporate governance preferences of institutional investors

J.A. Mc Cahery, Zacharias Sautner, Laura T. Starks

    Research output: Contribution to journalArticleScientificpeer-review

    223 Citations (Scopus)

    Abstract

    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.
    Original languageEnglish
    Pages (from-to)2905-2932
    Number of pages28
    JournalThe Journal of Finance
    DOIs
    Publication statusPublished - 10 Nov 2016

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