Bad Company! the Assumptions Behind Proxy Advisors' Voting Recommendations
Bibliographic record
Abstract
The corporate governance challenge for Canada is to improve the quality of its corporate performance, which has been declining relative to its international peers for decades. This is quite different from the usual assumption that corporate governance is primarily a matter of controlling managerial self-dealing. While important, board monitoring of management is only one aspect of its role in a corporation; research suggests corporate governance arrangements have a significant impact on corporate outcomes, particularly in areas such as innovation where Canada lags. Third-party proxy advisory firms, which provide advice to institutional investors in Canada on corporate governance matters, have grown in influence over the past decade. As securities regulators consider whether (and how) to treat them, an examination of the assumptions that underlie these advisors’ voting recommendations, and the influence these assumptions have on corporate decision-making, suggest these assumptions create perverse governance incentives and are contradicted by empirical research on what produces the best corporate outcomes. Pour le Canada, le defi que presente la gouvernance d’entreprise est d’ameliorer la qualite du rendement, laquelle est en declin constant depuis des decennies par rapport a ce qui se passe dans d’autres pays. Cette situation est fort differente de l’hypothese habituelle voulant que la gouvernance d’entreprise vise d’abord a controler les operations entre inities des membres de la direction. La surveillance de la gestion par le conseil d’administration est certes importante, mais ce n’est que l’un des volets du role du conseil au sein d’une societe par actions; la recherche suggere d’ailleurs que les arrangements concernant la gouvernance d’entreprise ont une incidence considerable sur les resultats des societes, en particulier dans des domaines comme l’innovation ou le Canada tire de l’arriere. Les societes d’expertise-conseil en matiere de procurations donnent aux investisseurs institutionnels au Canada des conseils sur les questions de gouvernance d’entreprise; au cours de la derniere decennie, elles ont acquis une influence grandissante. Tandis que les instances reglementaires en matiere de valeurs mobilieres se demandent s’il y a lieu de s’interesser a ces societes (et comment intervenir), un examen des postulats qui sous-tendent les recommandations de vote de ces conseillers et leur influence sur la prise de decision des entreprises suggere qu’ils creent des incitatifs pervers en matiere de gouvernance et sont contredits par la recherche empirique sur les causes des meilleurs resultats des entreprises.
Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.
How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.022 | 0.137 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.002 | 0.006 |
| Scholarly communication | 0.006 | 0.006 |
| Open science | 0.003 | 0.001 |
| Research integrity | 0.005 | 0.006 |
| Insufficient payload (model declined to judge) | 0.014 | 0.004 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".