The Influence of Institutions on Corporate Governance through Private Negotiations: Evidence from TIAA-CREF

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 corresp...

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Bibliographic Details
Published in:The Journal of finance (New York) 1998-08, Vol.53 (4), p.1335-1362
Main Authors: Carleton, Willard T., Nelson, James M., Weisbach, Michael S.
Format: Article
Language:English
Subjects:
Boards of directors
Business structures
Common stock
Corporate governance
Institutional investments
Investors
Minority voters
Negotiations
Pension funds
Preferred stock
Proxy reporting
Proxy statements
Roles
Shareholder voting
Shareholders
Statistical analysis
Studies
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Summary: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.
ISSN:0022-1082
1540-6261
DOI:10.1111/0022-1082.00055