Expressive Shareholder Democracy: A Multilevel Study of Shareholder Dissent in 15 Western European Countries

Abstract

This study develops an expressive understanding of shareholder dissent. In this view, shareholder dissent is not only about the voting outcomes of proposals put to the vote, but also expresses an evaluation of the firm's corporate governance set-up. We hypothesize that shareholder dissent expresses an agency theoretical evaluation of corporate governance, but that the degree to which the capitalist system of a country is a coordinated market economy (CME) leads shareholders to evaluate corporate governance more in team production terms. We test our theoretical model using multilevel techniques on a sample of 12,513 proposals voted on in 717 firms listed in 15 Western European countries and find support for our predictions. Our study not only contributes to a better understanding of the corporate governance role of shareholder dissent, but also shows that what shareholders express through dissent differs across national contexts.