Proxy advisory firms wield large influence with voting shareholders. However, conflicts of interest may arise when an advisor sells services to both investors and issuers. Using a unique data set on voting recommendations, I find that for most types of proposals, competition from a new entrant reduces favoritism toward management by an incumbent advisor that serves both corporations and investors. The results are not driven by factors that influence the entrant’s coverage decision, such as the marginal cost of new coverage or previously biased recommendations by the incumbent. Similar to other information intermediaries, biased advice by proxy advisors is shown to have real, negative consequences that allow management to enjoy greater private benefits. These results suggest conflicts of interest are a real concern in the proxy advisory industry, and increasing competition could help alleviate them.\ud\ud
展开▼
机译:代理咨询公司在有投票权的股东中具有很大的影响力。但是,当顾问向投资者和发行人出售服务时,可能会产生利益冲突。通过使用有关投票建议的独特数据集,我发现对于大多数类型的建议,来自新进入者的竞争都会减少为公司和投资者服务的现任顾问对管理的偏爱。结果不受影响进入者的覆盖面决定的因素驱动,例如新覆盖面的边际成本或任职者先前提出的偏向建议。与其他信息中介机构相似,代理顾问的有偏见的建议也显示出具有实际的负面影响,使管理层可以享受更大的私人利益。这些结果表明,利益冲突是代理咨询行业中真正关心的问题,而日益激烈的竞争可能有助于缓解它们。\ ud \ ud
展开▼