Through a combination of a controlled experiment and a survey, we examine the effect of voting power on shareholders’ voting behavior at general meetings. To avoid a selection bias, common in archival voting data, we exogenously manipulate shareholders’ power to affect the outcome. Our findings suggest that, when it comes to corporate decisions involving conflicts of interest, voting power nudges shareholders to oppose management and to choose the “right” alternative, that is, vote against a proposal which _prima facie_ does not (...) serve the company’s best interest. This effect obtained even when the dissenting vote contravened the choices of all other voters. Furthermore, the drive “to do the right thing” was established as significant, above and beyond the size of the economic stake. We also demonstrate that strategic voting among institutional investors is contingent on voting power: when in a position to affect the outcome of a vote, institutional investors tend to eschew strategic considerations and display fewer consistent patterns in their voting, compared to situations in which their ability to make a difference is limited. In anticipation of a “bad” proposal to be put to vote at the general shareholder meeting, institutional investors prefer to negotiate terms with management beforehand, and vote against it only after such negotiations fail. Our results shed new light on the “behind the scenes” processes in shareholder voting and underscore the importance of institutional investor agency to corporate governance, accountability, and minority shareholder representation. (shrink)

In this paper, we view the party charged with forming a governing coalition immediately following an election as attempting to put together a coalition that will, with some compromise, promote its ability to implement its legislative agenda and to influence the legislative outcome in this direction. We thus view the problem of the coalition leader as one of maximizing its influence as measured by the Penrose measure of absolute voting power and subject this hypothesis and three variants to empirical testing (...) using election data from nine countries. Two variants, namely: restricting the maximization process to the set of closed winning coalitions, or likewise but with a further requirement that the winning coalition selected be of minimal range, achieved levels of predictive success comparable to the Leiserson-Axelrod minimal range theory, suggesting that a closer examination of the role of a priori measures of power in political coalition formation may be useful. (shrink)