| Article ID: | iaor20115994 |
| Volume: | 22 |
| Issue: | 3 |
| Start Page Number: | 675 |
| End Page Number: | 687 |
| Publication Date: | May 2011 |
| Journal: | Organization Science |
| Authors: | Hillman Amy J, Shropshire Christine, Certo S Trevis, Dalton Dan R, Dalton Catherine M |
| Keywords: | organization |
Each year shareholders, via exercise of their proxy votes, have the opportunity to voice their support or displeasure with firms and director nominees. Examining over 2,000 Fortune 500 director nominees, we explore those indicators available to shareholders at the time of directors' (re)election to provide insight into shareholder discontent with director monitoring. By studying actual voting behaviors, we provide new perspective to understanding director elections as a governance process. Employing a multilevel approach, we find support for agency‐theoretic relationships between several firm and director characteristics and shareholder opposition to directors seeking (re)election to the board. At the firm level, we find that CEO compensation level and board size are positively related to the withholding of shareholder votes in director elections, a behavior indicative of shareholder discontent. Complementing these findings, at the director level, we find that affiliated director status, tenure, and number of outside directorships are positively related, and director block ownership is negatively related to shareholder discontent with director monitoring.