Theory as well as empirical studies suggest that voting at annual general shareholder meetings (AGMs) creates value. Indeed, voting gives shareholders a final say on major company decisions, such as appointments to the board of directors and the approval of takeover offers. It also enables shareholders to show their support the current management or to disagree with the latter. It is then somewhat surprising that, on average, voter turnout at AGMs is only about 60%. Still, the average voter turnout varies across the world with a minimum of 41% for New Zealand and a maximum of 100% for Cyprus. Moreover, the average approval rates for management-initiated proposals vary between 84% and 100%. In a study with Peter Limbach and Simon Lesmeister , we propose the level of trust in others that prevails in a country has an effect on shareholder voting and explains differences in voting patterns across countries. The economics literature (see e.g. Zak and Knack 2001 ) finds that trust increa
I am a full professor at IE Business School in Madrid. On this blog, I discuss my research on corporate governance as well as topical issues on corporate governance and related issues.