Does Shareholder Proxy Access Improve Firm Value? Evidence from the Business Roundtable Challenge

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Does Shareholder Proxy Access Improve Firm Value? Evidence from the Business Roundtable Challenge

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Title: Does Shareholder Proxy Access Improve Firm Value? Evidence from the Business Roundtable Challenge
Author: Becker, Bo; Bergstresser, Daniel; Subramanian, Guhan

Note: Order does not necessarily reflect citation order of authors.

Citation: Becker, Bo, Guhan Subramanian, and Daniel B. Bergstresser. "Does Shareholder Proxy Access Improve Firm Value? Evidence from the Business Roundtable Challenge." Journal of Law & Economics (forthcoming).
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Abstract: We use the Business Roundtable’s challenge to the SEC’s 2010 proxy access rule as a natural experiment to measure the value of shareholder proxy access. We find that firms that would have been most vulnerable to proxy access, as measured by institutional ownership and activist institutional ownership in particular, lost value on October 4, 2010, when the SEC unexpectedly announced that it would delay implementation of the Rule in response to the Business Roundtable challenge. We also examine intra-day returns and find that the value loss occurred just after the SEC’s announcement on October 4. We find similar results on July 22, 2011, when the D.C. Circuit ruled in favor of the Business Roundtable. These findings are consistent with the view that financial markets placed a positive value on shareholder access, as implemented in the SEC’s 2010 Rule.
Other Sources: http://ideas.repec.org/s/ucp/jlawec.html
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:9932210

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