Board of directors' responsiveness to shareholders: Evidence from shareholder proposals

Yonca Ertimur, Fabrizio Ferri, Stephen R. Stubben

Research output: Contribution to journalArticlepeer-review

155 Scopus citations


In recent years boards have become significantly more likely to implement non-binding, majority-vote (MV) shareholder proposals. Using a sample of 620 MV proposals between 1997 and 2004, we find that shareholder pressure (e.g., the voting outcome and the influence of the proponent) and the type of proposals are the main determinants of the implementation decision, while traditional governance indicators do not seem to affect the decision. We then examine the labor market consequences of the implementation decision for outside directors and find that directors implementing MV shareholder proposals experience a one-fifth reduction in the likelihood of losing their board seat as well as other directorships.

Original languageEnglish (US)
Pages (from-to)53-72
Number of pages20
JournalJournal of Corporate Finance
Issue number1
StatePublished - Feb 1 2010
Externally publishedYes


  • Corporate governance
  • Director turnover
  • Shareholder proposals

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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