Shareholder Proposal Rules and Practice: Evidence from a Comparison of the United States and United Kingdom
56 Pages Posted: 4 Nov 2012
Date Written: August 16, 2012
We provide an in-depth comparison of US and UK shareholder proposal rules and relate the differences in rules to differences in proposing activities, using comprehensive shareholder proposal data from both countries for 2000-2006. UK proposal rules are more onerous on proposal sponsors, but UK proposals are a more powerful governance device than US counterparts, because they are binding and UK shareholders have the statutory right to call special meetings and elect directors. Consequently, we observe most UK proposals are presented at special meetings and target board election. Institutions are the most active sponsor of UK proposals. As US proxy rules emphasize shareholder participation and protection rather than empowerment, there are a significantly greater number of shareholder proposals initiated in the US during the sample period, and small shareholders and social proposals dominate the proposing scene of the US.
Keywords: Corporate Governance, Shareholder Proposals, Shareholder Activism, Proxy Voting, Proxy Access, Proxy Reform
JEL Classification: F30, G20, G34, K10
Suggested Citation: Suggested Citation