The Changing Landscape of Corporate Governance Disclosure: Impact on Shareholder Voting

We find that firms increasingly voluntarily adopt director skills matrices. Consistent with these image-based disclosures decreasing investors’ costs of evaluating director expertise, matrices lead to higher director vote support, particularly among cases where directors’ contribution to the firm was less clear. However, following poor performance, firms are more likely to utilize matrices to window dress director skills, and non-attentive investors are less likely to see through such behavior. Benefits of matrices are greatest among firms with less window dressing and with more incremental information relative to the director bios, as measured in terms of director retention and new board seats.