Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2021
  • Working Paper
  • HBS Working Paper Series

Proxy Advisory Firms and Corporate Shareholder Engagement

By: Aiyesha Dey, Joshua White and Austin Starkweather
  • Format:Print
  • | Language:English
  • | Pages:76
ShareBar

Abstract

We examine the influence of proxy advisors on firms’ shareholder engagement behavior. Our analyses exploit a quasi-natural experiment using Say-On-Pay voting outcomes near a threshold that triggers a review of engagement activities by Institutional Shareholder Services (ISS). Firms receiving ISS treatment exhibit a swift and substantive increase in engagement, especially those with weaker ex-ante governance. The elevated engagement persists beyond the period of ISS scrutiny. Treated firms alter elements of compensation and pay transparency that align with shareholder feedback, and enjoy ex-post economic benefits. Our findings indicate a disciplinary spillover effect of ISS through enhanced and enduring firm-shareholder interactions.

Keywords

Proxy Advisors; ISS; Shareholder Engagement; Disclosure; Business and Shareholder Relations; Executive Compensation; Corporate Disclosure

Citation

Dey, Aiyesha, Joshua White, and Austin Starkweather. "Proxy Advisory Firms and Corporate Shareholder Engagement." Harvard Business School Working Paper, No. 21-137, June 2021. (Revised February 2022.)
  • SSRN
  • Read Now

About The Author

Aiyesha Dey

Accounting and Management
→More Publications

More from the Authors

    • March 2022
    • Faculty Research

    Scott Tucker (A) and (B)

    By: Aiyesha Dey
    • March 2022
    • Faculty Research

    Corporate Governance: A Three Pillar Framework

    By: Aiyesha Dey
    • March 2022
    • Faculty Research

    Governance of Organizations: The CEO Factor

    By: Aiyesha Dey
More from the Authors
  • Scott Tucker (A) and (B) By: Aiyesha Dey
  • Corporate Governance: A Three Pillar Framework By: Aiyesha Dey
  • Governance of Organizations: The CEO Factor By: Aiyesha Dey
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College