Voice Without Influence? Global Investor Voting Rationale Disclosures in Korea

This study investigates how global institutional investors respond to gender diversity and climate risk concerns in Korean firms through disclosed voting rationales and how these disclosures subsequently influence corporate policies. We find mixed results.

First, voting rationale disclosures are more sensitive to gender diversity concerns than to climate risk. Specifically, investor opposition citing gender diversity decreases as the ratio of female directors rises. However, opposition citing climate risk does not increase in response to higher total CO2 emissions.

Second, we find that voting rationale disclosures have a limited influence on gender or climate-related corporate policies. While opposition citing gender diversity appears to prompt increases in the number and ratio of female directors in subsequent years, this pattern is confined to large firms subject to gender quota laws and is observed only during the years preceding the law's implementation. Furthermore, we find that opposition based on climate risk concerns is associated with subsequent reductions in total CO2 emissions, but only for small firms. Lastly, the publication of a sustainability report is associated with higher firm value when global institutional investors do not issue opposing rationales against management proposals, but this association holds only for small firms.