Institutional investor pushback eases

The percentage of company resolutions opposed by large institutional investors declined in the first half ended September, even as promoters continue to have their way on most decisions put to a vote.

- Dipalibanka

About 13% of the 12,134 shareholder resolutions disclosed by 1,566 NSE main board listed companies were opposed by institutions such as mutual funds, insurance companies, and sovereign wealth funds, down from 16% in the same period last year, according to a Primeinfobase report. Within the Nifty 50 as well, the dissent among shareholders for resolutions eased to 9% from 11%.

A total of 2,124 companies proposed 16,693 resolutions during the six months, but institutional voting data was available for only 12,134 of them.

“The fall in dissent is a positive sign as it indicates that companies are taking a consultative stance and engaging better with shareholders and proxy advisors,” said Pranav Haldea, the managing director of Prime Database Group. “A higher level of scrutiny has resulted in better quality of resolutions being proposed with a lesser number of them being opposed.”

He attributed it to better regulations, mandatory e-voting, stewardship codes for institutions and the rising influence of proxy advisory firms, which have helped improve governance and reduce conflict between companies and shareholders.