The quality of corporate governance and directors’ elections

Download This Article

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

This study aims to analyse the link between the votes cast at directors’ elections and the quality of corporate governance practices. The regression analyses on the secondary data were performed using a sample of Canadian companies listed on the Toronto Stock Exchange and included in corporate governance rankings published by the Canadian newspaper The Globe and Mail and carried out by the University of Toronto’s Clarkson Centre for Business Ethics. The results show that shareholders only slightly take the quality of a firm’s corporate governance practices into account when electing directors. Our findings also indicate that more than 96% of the votes cast are in favour of the candidates nominated and show very little variance. This study differs from previous studies by focusing directly on the election of directors rather than on stock prices to examine how shareholders express their expectations about the quality of corporate governance practices.

Keywords: Directors’ Elections, Shareholder Democracy, Governance Practices, Corporate Governance Index, Board of Directors

Authors’ individual contribution: Conceptualization — S.B., M.C., and V.C.; Methodology — M.C.; Formal Analysis — M.C.; Resources — V.G.; Writing — S.B.; Supervision — V.G.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G38, M12

Received: 23.11.2021
Accepted: 19.01.2022
Published online: 21.01.2022

How to cite this paper: Berthelot, S., Coulmont, M., & Gagné, V. (2022). The quality of corporate governance and directors’ elections. Corporate Ownership & Control, 19(2), 28–37. https://doi.org/10.22495/cocv19i2art2