Electronic voting in shareholder meetings and the market value of cash holdings

Abstract

Electronic voting in shareholder meetings facilitates shareholders' direct monitoring by reducing the cost of attending the meetings. This study investigates how adopting electronic voting in shareholder meetings affects the market value of cash holdings. We document that the value of cash holdings is higher for firms adopting electronic voting than for non-adopting firms, especially for firms with large minority ownership and free cash flows. The increased value of cash is attributable to firms engaging in investments that are more value relevant. Collectively, the findings suggest that shareholders perceive corporate governance as strengthened with the adoption of electronic voting. This study contributes to the literature by providing initial empirical evidence on the benefits of electronic voting.