Voting Rationales

Voting Rationales

Roni Michaely, Silvina Rubio, Irene Yi

Series number :

Serial Number: 

Date posted :

August 14 2023

Last revised :

August 14 2023
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  • institutional investors • 
  • voting • 
  • voting rationales • 
  • Corporate governance

We examine why institutional investors vote the way they vote on director elections, using a novel dataset on voting rationales provided by institutional investors.

We find that the most important reasons for opposing directors are board independence, board diversity, tenure, firm governance, and busyness; institutional investors are also increasingly voting against directors to hold them accountable for failure to address environmental and social issues. We find that institutional investors’ concerns are well-grounded: companies with low board gender diversity receive more rationales on board diversity, similar for companies with long director tenure and busy directors. This is consistent with institutional investors devoting significant effort toward governance research. Finally, companies with high dissent voting related to board diversity, tenure, and busyness improve their board composition in the following year. Our results suggest that directors are
willing to address concerns that result in high shareholder dissent, and voting rationales can be an effective tool to communicate the source of dissent.


Real name:
Silvina Rubio
Real name:
Irene Yi