Using data on the universe of US-based mutual funds, we find that two out of five fund families hold corporate bonds of firms in which they also own an equity stake. We show that the greater the fraction of debt a fund family holds in a given firm, the greater its propensity to vote in line with the interests of firm debt holders at shareholder meetings.
Voting has direct policy consequences as firms that receive more votes in favor of creditors make corporate decisions more in line with the interests of debt holders.
This introductory chapter provides the reader with some figures about institutional investors’ role in the governance of listed companies in the US...
We analyze voting records for management proposals and find that investors today hold directors accountable for a much wider range of issues, such as...