This paper also explore the influence of proxy advisors such as ISS and Glass Lewis. The authors find they rarely mention some of the most common rationales, such as board diversity or director tenure, and they differ in the relative importance assigned to other rationales. This finding suggests many institutional investors vote independently.

The authors next investigate whether rationales reveal companies’ real governance problems. They compare the rationales with companies’ actual board characteristics and find strong alignment. For instance, firms that receive diversity-related rationales tend to have less diverse boards. Similarly, rationales flagging long tenure or excessive board seats correspond to companies where such issues are indeed present. This observation supports the idea that investors are not just engaging in rationale washing: their explanations reflect meaningful concerns. Even more compelling, investors who frequently cite certain issues (e.g., lack of diversity) are more likely to vote against directors at companies with those problems. These patterns suggest investors are voting thoughtfully and using rationales to communicate their governance priorities.

Do firms actually respond to these concerns? This study finds  they do. Companies with high dissent that receive rationales about board diversity are more likely to increase female board representation in the following year. Similar patterns emerge for tenure, busyness, and CEO duality. Importantly, companies that respond to these concerns see a reduction in dissenting votes the next year—suggesting that addressing rationales improves investor support.

The authors take care to rule out alternative explanations. For instance, they show high dissent alone does not prompt change; companies respond only when explicit rationales pointing to a specific issue accompany the dissent. The findings hold even in settings where proxy advisors recommended voting for the directors, or where direct investor engagement was unlikely. They also consider whether rationales simply restate existing voting policies. But these policies are often broad and applied flexibly. The specific rationale accompanying a vote—for example, citing poor board diversity—offers unique information that goes beyond what a generic voting guideline would reveal.

Although the main analysis centers on dissent, the authors also examine rationales for votes in favor, which are far less common and often lack substance. The most frequent type is a generic endorsement (e.g., “A vote FOR is warranted”), followed by soft concerns that do not rise to the level of opposition. Only a small fraction refers to positive governance features such as strong board independence or diversity. The absence of detailed rationales on votes for underscores a broader point: investors are more likely to explain when they disagree than when they approve.

To conclude, voting rationales are a promising new tool in the corporate governance landscape. They provide transparency about investors’ priorities, signal concerns to firms, and offer investors a low-cost way to engage even when they hold small stakes.Companies appear to take these rationales seriously—making board changes in response and seeing lower dissent in the future. Understanding not just how institutional investors vote but why they vote the way they vote is essential. This study shows voting rationales are not just symbolic gestures; they are a meaningful form of shareholder communication that can drive real corporate change.