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The Influence of Institutions on Corporate Governance through Private Negotiations: Evidence from TIAA‐CREF
Author(s) -
Carleton Willard T.,
Nelson James M.,
Weisbach Michael S.
Publication year - 1998
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/0022-1082.00055
Subject(s) - negotiation , corporate governance , shareholder , voting , business , accounting , finance , process (computing) , political science , computer science , politics , law , operating system
This paper analyzes the process of private negotiations between financial institutions and the companies they attempt to influence. It relies on a private database consisting of the correspondence between TIAA‐CREF and 45 firms it contacted about governance issues between 1992 and 1996. This correspondence indicates that TIAA‐CREF is able to reach agreements with targeted companies more than 95 percent of the time. In more than 70 percent of the cases, this agreement is reached without shareholders voting on the proposal. We verify independently that at least 87 percent of the targets subsequently took actions to comply with these agreements.