Proxy advisory firm InGovern said today that 2017 has become the tipping point of shareholder activism in the country, with unprecedented number of cases where shareholders dissented with the boards as well as the managements of companies.
"Increase in instances of shareholder activism is a clear indicator that shareholders are gradually seeing themselves as owners than as mere investors," it said in a report.
"This should act as a catalyst in improving the corporate governance culture, transparency in disclosures and level of engagement with stakeholders across companies in India," it added.
During the proxy season under review, InGovern tracked 10,972 proposals at 1,502 companies across various types of shareholder meetings, including annual general meetings.
According to the firm, the proxy season starts from January and peaks in September when a bulk of shareholder meetings are held.
"2017 has become the tipping point of shareholder activism in India. The number of cases where shareholders dissented over their board and management is unprecedented, when compared with previous years," it said in the report.
The proxy advisory firm further said that shareholder activism means any shareholder trying to bring about a change that may or may not be supported by the company's management or board.
Noting that shareholder activism fosters increased engagement of public shareholders with the company, the report said, "anecdotal evidence suggests that shareholder activism makes companies more efficient and capital productivity becomes higher".
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