Trust and Shareholder Voting

Trust and Shareholder Voting

Simon Lesmeister, Peter Limbach, Marc Goergen

Series number :

Serial Number: 

Date posted :

July 28 2018

Last revised :

March 12 2019
SSRN Share


  • culture • 
  • monitoring • 
  • Shareholder expropriation • 
  • Shareholder voting • 
  • trust

We test the hypothesis whether a specific aspect of culture – trust in others – affects shareholder voting by substituting for costly monitoring. We find consistent evidence that the percentage of votes cast at shareholder meetings is lower in high-trust countries (and U.S. counties) while the percentage of votes in support of management proposals is higher.

Shocks to trust and IV regressions confirm these results. We also find that shareholder voting is more valuable in low-trust countries, as reflected by a more positive effect on firm performance, which suggests that managers do not exploit lower levels of monitoring when trust is high.


Real name:
Simon Lesmeister
Real name: 
Peter Limbach
University of Cologne and Centre for Financial Research (CFR)