ES Risks and Shareholder Voice

ES Risks and Shareholder Voice

Yazhou He, Bige Kahraman, Michelle Lowry

Series number :

Serial Number: 

Date posted :

September 23 2021

Last revised :

September 23 2021
SSRN Share


  • shareholder proposals • 
  • voting • 
  • mutual funds • 
  • Environmental • 
  • Social

While shareholder proposals related to ES issues nearly always fail, we show that investors’ support for these proposals contains information regarding future risks that firms face. Support levels are informative regarding the probability of negative tail returns that stem from future ES incidents.

Examining the economic channels underlying this finding, we find that agency frictions contribute to proposal failure, leading to predictable tail events. Contrasting ES versus non-ES failed proposals within the same firm, we find that predictability is unique to ES initiatives; this is consistent with higher uncertainty regarding the value of ES initiatives exacerbating agency frictions.


Real name:
Yazhou He
Real name:
Bige Kahraman