Climate change and corporate governance
Investors today hold directors accountable for a much wider range of issues, such as climate change and board diversity, than in the past, write the authors of Why do Investors Vote Against Corporate Directors? From the abstract: “Within environment, climate change is the only subcategory that is significantly associated with voting outcome. … Within governance, board diversity is significantly related to voting outcome. However, we find that social issues are not relevant for voting outcomes. Institutional investors have started providing rationale for why they voted against a particular director. The existence of such rationale related to board diversity, busyness, tenure, and independence result in more dissent votes. Female directors receive fewer dissent votes but not so if they are long-tenured. The mere presence of a shareholder proposal is associated with lower support for directors. This effect is driven by governance and not socially responsible proposals.” Authors: Reena Aggarwal, Georgetown University – Robert Emmett McDonough School of Business; European Corporate Governance Institute; Sandeep Dahiya, Georgetown University – Department of Finance; Umit Yilmaz, Georgetown University – McDonough School of Business
More of the latest research:
- Climate Change Stress Testing for the Banking System
- Measuring the Climate Risk Exposure of Insurers
