Skip Navigation


American Law and Economics Review Advance Access originally published online on August 6, 2008
American Law and Economics Review 2008 10(2):159-184; doi:10.1093/aler/ahn010
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
10/2/159    most recent
ahn010v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Listokin, Y.
Right arrow Search for Related Content
Related Collections
Right arrow G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Right arrow K22 - Corporation and Securities Law
Right arrow D72 - Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

American Law and Economics Review

Management Always Wins the Close Ones

Yair Listokin

Yale Law School

Send correspondence to: Yair Listokin, Yale Law School, 127 Wall St. New Haven, CT 06511, USA; E-mail: yair.listokin{at}yale.edu.

JEL Classification: G34, K22, D72


  Abstract

While much has been made of "shareholder democracy" as a lever of corporate governance, there is little evidence about the efficacy of voting. This paper empirically examines votes on management-sponsored resolutions and finds widespread irregularities in the distribution of votes received by management. Management is overwhelmingly more likely to win votes by a small margin than lose by a small margin. The results indicate that, at some point in the voting process, management obtains highly accurate information about the likely voting outcome and, based on that information, acts to influence the vote. The precise point at which this occurs is unclear, though it is likely to be near the "poll-closing" time. Whatever the cause of management's advantage, it is clear that shareholder voting does not constitute a "representative" direct democracy.

I would like to thank Bruce Ackerman, Ian Ayres, Lucian Bebchuk, Stephen Deane, Alan Gerber, Allen Ferrell, Heather Gerken, Henry Hansmann, Daniel Ho, Stephanie Listokin, Jonathan Macey, Daniel Markovits, Edward Rock, Eric Roiter, Roberta Romano, Max Schanzenbach, Alan Schwartz, David Super and John Wilcox, and seminar participants at the Conference on Empirical Legal Studies, Florida State University Law School, Harvard Law School, Vanderbilt Law School, and Yale Law School for many helpful conversations and Shenyi Wu for able research assistance. I also thank the editor, John Donohue, and an anonymous referee for extremely useful comments and suggestions. All errors are my own.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 Am Law Econ RevHome page
Y. Listokin
Corporate Voting versus Market Price Setting
Am. Law Econ. Rev., October 23, 2009; (2009) ahp015v1.
[Abstract] [Full Text] [PDF]


Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.