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In this chapter, we assess shareholder voting behaviour in our sample of seven European Member States. We consider the AGM’s agenda, shareholder proposals, rejected voting items and dissent rates. Our research shows, inter alia, that certain voting items receive higher dissent rates than others. These are, for instance, director elections and say-on-pay resolutions. Other voting items, such as the approval of the annual accounts, are merely a formality.

This chapter investigates which factors contribute to (small) shareholder attendance using a hand-collected panel data set with information about turnout rates, voting behaviour and ownership structures of companies that are listed in seven Member States. We document how ownership concentration positively affects total shareholder turnout, but has a negative effect on small shareholder turnout. Voting power also affects small shareholder turnout rates; the greater small shareholder voting power, the greater their eagerness to vote. In addition, total and small shareholder turnout is higher the more important the meeting agenda. And, small shareholders tend to free-ride on large institutional shareholders and corporate insiders, but the magnitude of the free-rider effect is larger for the latter category of blockholders. Our results provide some important insights for the debate on shareholder rights and the role of the AGM in corporate governance. The results show that, despite the criticism, the AGM still plays an important role in small shareholder monitoring. Some topics seem to clearly motivate small shareholders to attend, while others are less relevant. Policy makers can stimulate shareholder monitoring by focusing on the factors that are determined in this study, but it is important to consider possible endogeneity issues as well.

This paper aims to clarify the relationship between the voting and engagement behaviour of institutional investors, i.e. institutional investor stewardship behaviour, and the enactment of stewardship by corporate boards. In doing so, this paper contributes to the evaluation of contemporary corporate governance systems and provides recommendations for the redesign of these systems.

This paper is based on a qualitative exploratory descriptive research study into assumed, prescribed and the actual behaviour of institutional investors. Their behaviour is explored through a survey and in-depth interviews with global institutional investors.

The prescription of institutional investor stewardship behaviour and the exploration of actual behaviour from an investors’ perspective led to the conclusion that assumed institutional investor stewardship exists variously as either “in form” (i.e. measured by compliance to the relevant corporate governance code) or “in substance” (i.e. the actual behaviour from the investors and investee companies’ perspective). The results suggest that that institutional investors’ actual stewardship behaviour as global investors requires a nuanced conclusion about the existence of institutional investor stewardship.

Although the number of semi-structured interviews with institutional investors was limited to just 14, these interviewees represent the majority share in terms of market capitalisation of Dutch listed companies. Additional research could clarify the perspective of other investors, such as pension funds and private investors.

The outcome of this research can serve as input for corporate governance reforms in the preambles of governance codes and the prescribed principles and best practice provisions of corporate governance and stewardship codes. This research identifies opportunities for further academic research to enrich the understanding of the role of institutional investors in enacting corporate stewardship.

This paper contributes to furthering the understanding of the mechanisms by which institutional investors, through their behaviour, contribute to enacting stewardship through their corporate boards. This is an important part of the corporate social responsibility of institutional investors. It also triggers a dialogue about the social and environmental impacts of stock listed companies.

This paper fulfils an identified need to develop knowledge about new paradigms and offers a more integrated approach to corporate governance reforms in terms of the role of institutional shareholders in the promotion of good corporate governance.

The purpose of this paper is to study filer identities and voting outcomes of Canadian shareholder proposals and their impact on shareholders' wealth during the period from 2001 to 2008.

In total, 762 Canadian shareholder proposals and related information on targeted firms were collected from the Shareholder Association for Research and Education (SHARE) and the System for Electronic Document Analysis and Retrieval (SEDAR) databases. Statistical analyses are carried out on the features of shareholder proposals. Regression analyses are performed on voting outcomes, and an event study is conducted to test the impact of shareholder proposals on stock prices.

The authors' analyses show that proposals submitted by institutions or coordinated shareholder groups receive stronger support than those submitted by individuals and religious groups. Targeted firms are more willing and more likely to reach agreements with institutional investors, which in turn prompts activists to withdraw their proposals. The voting behavior of the Ontario Teachers' Pension Plan (OTPP) has a significant impact on voting outcomes. The targeted firms' stock prices respond substantially to news on proposals submitted by institutional and coordinated investors and proposals on social and environmental issues.

In addition to in‐depth analyses (issues, filers, voting outcomes, and impacts on stock price) of Canadian shareholder proposals, this paper explores the voting behaviour and impact of a large institutional shareholder that has been passive in filing shareholder proposals. Special attention is paid to Canadian features of shareholder activism, and differences between Canadian and US shareholder proposals are highlighted and discussed. The paper thus extends shareholder activism studies from focusing on open shareholder activists to investigating passive institutional shareholders.

We examine the perceived influence of externally generated firm ratings of corporate social responsibility (CSR) on voting for shareholder-sponsored CSR proposals. Using stakeholder and legitimacy theories, we introduce two rationales that relate shareholder voting decisions to the firm’s CSR performance: the complementary perspective where investors rely on management’s branding or image of the firm for CSR performance, and the sufficiency perspective where shareholders consider legitimacy effects of firm CSR performance. Our examination of 473 CSR shareholder-sponsored proposals during the 2013 to 2015 proxy seasons reveals a negative relationship between support for shareholder-sponsored CSR proposals and CSR strengths, particularly for social and environmental CSR strengths. We also find a positive relationship between support for shareholder-sponsored CSR proposals and CSR concerns, particular in the area of environmental CSR concerns. These results partially support the sufficiency perspective that incorporates shareholder legitimacy concerns. When companies have poor CSR performance, shareholders may view further CSR initiatives as beneficial to the firm.

In this part of the book, we investigate the practical characteristics of AGMs in an extensive empirical analysis. For this, we consider the turnout rates of AGMs of seven European Member States between 2010 and 2014 in this chapter. We show that, although there are large differences in total and small shareholder turnout rates among Member States, there is an overall increasing trend in the 2010–2014 period. In contrast to what economic theory predicts, a substantial and increasing part of small shareholders actually participate in AGMs.

In the previous chapters of this part, we considered voter turnout, ownership concentration and voting behaviour of shareholders. In this chapter, we take a closer look at the types of shareholders that are present in our data set. We define five different types of shareholders and evaluate their stakes. Afterwards, we consider outsider shareholder voting behaviour and find that, when only considering these shareholders, dissent rates are significantly higher. These findings imply that it may be desirable for continental European countries to consider a rule like UK Listing Rules 9.2.2AR to ER.

From a theoretical agency perspective, the Annual General Meeting of Shareholders (‘AGM’) is an important corporate law solution for mitigating agency problems between shareholders and managers in large public corporations. At the AGM, shareholders are informed, they are offered a venue to discuss and ask questions, and they are involved in decision-making. Despite these theoretical important functions, the AGM is largely criticized in practice. Criticism contains, for example, rational apathy and free-rider behaviour that lead to low shareholder turnout, a lack of (meaningful) dialogue and side-stepping behaviour. Yet, fundamental empirical research on the AGM in practice is lacking, which makes this book highly relevant. This chapter provides the outline of the research that is conducted in this book.

The purpose of this paper is to analyze the influence of managerial discretion on the effectiveness of say on pay (SOP) as a governance mechanism. This goal covers an important gap since the issue of how effective SOP is in promoting more aligned compensation has proved somewhat controversial.

This empirical research opted for a panel methodology for the period 2003–2017, using a sample of large UK listed-companies (specifically, 3,445 firm-year observations). Data were obtained from several sources (Manifest Ltd, BoardEx, Worldscope, Factset Ownership and DataStream).

Results show that managerial discretion plays an important role in the effectiveness of SOP as a mechanism for increasing aligned CEO compensation. While individual discretion (latitude of objectives) exerts a negative effect, contextual discretion (latitude of action) increases SOP effectiveness. The global effect of managerial discretion is positive when there is high level of both individual and contextual discretion.

This empirical study provides evidence concerning an emerging topic in the literature regarding the impact of SOP as a shareholder activism mechanism of corporate governance on executive compensation. By taking managerial discretion into consideration as a relevant moderating factor, it also offers a better explanation of SOP effectiveness as a governance mechanism.