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Cyber democracy for better board representation? The effect of e-voting on excess control in an emerging economy

Author

Listed:
  • Kuo-Pin Yang
  • Christine Chou

    (Department of International Business, National Dong Hwa University, Hualien)

  • Gavin M Schwarz

    (School of Management, UNSW Business School, University of New South Wales, Sydney, NSW, Australia)

Abstract

With a growth in shareholder activism, the influence of shareholders on the make-up and selection of board members is increasingly acknowledged but under-explored. Focusing on one element of activism, this article considers the adoption and use of electronic voting (e-voting) for board elections in emerging economies, testing its effect on the excess control of controlling shareholders. Using a sample of board elections at 809 publicly listed Taiwanese companies, results challenge convention on governance and shareholder democracy. We show that adopting e-voting counterintuitively leads to greater levels of excess control which subsequently harms firm performance—an effect more pronounced in firms characterized by a pyramidal control structure and family-controlled firms. Findings offer an alternative view on shareholder democracy, revisiting expectations of benefits accrued from e-voting. JEL Classification: M10, L21, L25

Suggested Citation

  • Kuo-Pin Yang & Christine Chou & Gavin M Schwarz, 2021. "Cyber democracy for better board representation? The effect of e-voting on excess control in an emerging economy," Australian Journal of Management, Australian School of Business, vol. 46(4), pages 761-786, November.
    • Handle: RePEc:sae:ausman:v:46:y:2021:i:4:p:761-786
    DOI: 10.1177/0312896220983592
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    More about this item

    Keywords

    Activism; board composition; corporate governance; emerging economy; e-voting; excess control; shareholder democracy;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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