When Shareholders Speak Their Minds

A large proportion of shareholder proposals contested by firms receive support from other investors when put to a vote. In an era when corporate responsibility has increasingly come into the spotlight, shareholder activism is gaining importance and attention. In particular, equipped with the Securities Exchange Act of 1934, shareholders can call for fellow investors to vote on certain demands made of a firm’s management and board of directors. Researchers have suggested that this type of shareholder activism has the potential to effectively facilitate changes in firms’ policies, strategy, and governance structure.