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Shareholders in the boardroom: Wealth effects of the SEC’s proposal to facilitate director nominations

Akyol, A.C., Lim, W.F., and Verwijmeren, P. (2012) Shareholders in the boardroom: Wealth effects of the SEC’s proposal to facilitate director nominations. Journal of Financial and Quantitative Analysis, 47 (5). pp. 1029-1057. ISSN 0022-1090 (doi:10.1017/S0022109012000373)

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Publisher's URL: http://dx.doi.org/10.1017/S0022109012000373

Abstract

Current attempts to reform financial markets presume that shareholder empowerment benefits shareholders. We investigate the wealth effects associated with the SEC’s rule to facilitate director nominations by shareholders. Our results are not in line with shareholder empowerment creating value: the average daily abnormal returns surrounding events that increase (decrease) the probability of passage of the proposal are significantly negative (positive). Furthermore, given an increase in the probability of passage of the proposal, firms whose shareholders are more likely to use the rule to nominate directors experience more negative abnormal returns.

Item Type:Article
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Verwijmeren, Prof Patrick
Authors: Akyol, A.C., Lim, W.F., and Verwijmeren, P.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Journal of Financial and Quantitative Analysis
Publisher:Cambridge University Press
ISSN:0022-1090
ISSN (Online):1756-6916
Published Online:14 June 2012

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