Does shareholder proxy access improve firm value? Proxy access is the first serious attempt to legislate corporate governance at a national level. The topic of proxy access has generated a heated debate in the corporate governance community for some time. Separation between the ownership and control of large firms is a defining feature of modern capitalism. Corporate boards are shareholders’ primary tool for exercising control over their companies. But the board may fail to pursue shareholders’ best interests. Academic research suggests that the regulation of corporate governance is viewed negatively by shareholders. It is argued in a competition, that director election process is desirable, and that giving institutional investors more influence on the board will likely benefit all shareholders. A director is selected by the nominating and governance committee to satisfy a specific corporate need for functional, geographic, industry, or regulatory experience. He must also be compatible with fellow directors and management. 

Yes, proxy access has a very deep impact on the improvement of the firm value because when there would be proxy access than directors nominated by activists would not merely run in the interest of shareholders but also in the interest of board of directors and management further more proxy access reduces the cost of contested elections, thereby increasing the likelihood they will occur. 

ANUM AHMAD,  

Faisalabad, June 29.