Shareholder influence over director nomination via proxy access: Implications for agency conflict and stakeholder value
Article first published online: 15 MAY 2012
Copyright © 2012 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 33, Issue 12, pages 1431–1451, December 2012
How to Cite
Campbell, J. T., Campbell, T. C., Sirmon, D. G., Bierman, L. and Tuggle, C. S. (2012), Shareholder influence over director nomination via proxy access: Implications for agency conflict and stakeholder value. Strat. Mgmt. J., 33: 1431–1451. doi: 10.1002/smj.1989
- Issue published online: 22 OCT 2012
- Article first published online: 15 MAY 2012
- Accepted manuscript online: 1 MAY 2012 07:51AM EST
- Manuscript Revised: 26 APR 2012
- Manuscript Received: 1 APR 2011
- agency theory;
- board of directors;
- corporate governance
Corporate governance research indicates that corporate boards of directors may be overly beholden to management, which can be detrimental to firm value creation. Drawing upon agency theory and the governance law literature, we examine the effects of a new SEC rule designed to lessen managerial power by increasing large, long-term shareholders' influence in the director nomination process. We predict and find support for a positive overall market reaction to the rule's announcement as well as a greater reaction for firms with characteristics that suggest compromised board independence or greater CEO control. Moreover, we examine the implications of greater shareholder voice for another key stakeholder group, firm bondholders, and find evidence that it is also value increasing. We conclude by discussing important implications for theory and practice. Copyright © 2012 John Wiley & Sons, Ltd.