I study whether minority shareholder empowerment, enabled by the remote voting adoption, impacts board gender diversity through greater foreign shareholder participation and influence. I constructed a unique governance and activism dataset, including administrative and hand-collected data. In a natural experiment setting, the Difference in Differences approach estimates that the mechanism increased the voting turnout in 8 p.p. in the first year of adoption. The reform also allowed the creation of more monitoring committees. 98% of the users are international investors. Analyzing the investing patterns of four of the biggest funds and corporate diversity pushers world-wide, I find that they enhanced considerably the number of invested companies, starting during the remote voting adoption. There was also an increase in the presence and voting participation of pension funds and sustainability-driven investors at general meetings. Mainly, I document an increase of approximately 3 p.p. in the percentage of women on boards, representing nearly 50% of the pre-adoption ratio of female directors. Foreign investors support for female directors during board elections increased six times, migrated from male directors. The results have several policy implications related to minority shareholder engagement and corporate governance structures. In particular, they provide evidence on the potential of the participation of international investors with universal ownership as a mechanism to reduce the gap in the quality of governance practices between developed and emerging economies and address strategies to enhance corporate board gender diversity other than quota-related regulations.
Complete tool for submission, evaluation and publication of proceedings for scientific events.
