Proxy advisory firms are independent, for-profit consulting companies that provide voting recommendations to individual and institutional investors. Research shows that these firms have significant influence on voting outcomes. Given this influence, it is important that investors ensure that the policies of these firms are “accurate” — i.e., that they successfully and reliably differentiate between good and bad future outcomes.
Copyright held by David F. Larcker, Allan McCall, and Brian Tayan. Further inquiries about reproduction and use should be directed to the Corporate Governance Research Initiative.
