Shareholder Voting and COVID-19: The China Experience

Abstract

Using state-of-the-art data-mining techniques, this research constructs a unique dataset comprising the votes cast by Chinese shareholders on 15,553 resolutions laid before 2,888 general meetings of Shanghai Stock Exchange-listed companies in the six-year period between 2015 and 2020. This research empirically depicts, for the first time, the manner in which minority shareholders exercise their rights to vote in China, presenting a counter-thesis to the conventional wisdom of shareholder passivity. In particular, this research offers a unique perspective on how the COVID-19 pandemic has influenced Chinese shareholders’ voting behaviour by focusing its empirical investigation on the 76-day time window from 23 January to 7 April 2020, during which period Wuhan, the epicentre of the COVID-19 outbreak in China, came under a mandatory lockdown order. Our findings offer strong empirical evidence that Chinese shareholders cast their votes in a characteristically more informed manner in the 2020 sample period than they did during the sample periods in the previous five years. The research highlights the potential of shareholder activism in economies where share ownership is concentrated. It also has implications for the ongoing discourse on virtual shareholder meetings and the shareholder franchise.