Agenda-building and agenda-setting in corporate proxy contests: Exploring influence among public relations efforts, financial media coverage and investor opinion

The rise of shareholder activism in recent years has sparked a resurgence in the number of contested corporate elections, known as corporate proxy contests or proxy fights, held each proxy season in the U.S. financial markets. This study investigated the role of mass mediated-influence during such contests from an agenda-building and agenda-building perspective. Specifically, this content analytic investigation assessed the transfer of issue and stakeholder salience among the information subsidies of the competing campaigns, financial news media coverage, and investor opinion in the 25 largest U.S. proxy fights for board representation or control that went to a shareholder vote over a five-year period (2005-2009).;At a system-level, this study found that the sheer number of information subsidies disseminated during a contest did not appear to significantly affect the amount of raw media attention the contest received. Attention was linked with the financial size of the incumbent candidate in the contest. The larger the annual revenue, and, to a lesser extent, stock market capitalization of the incumbent, the more coverage the contest generally received. Shifting to analysis at an individual contest level, there was solid evidence of issue agenda-building linkages (with reciprocal influence) among candidate information subsidies and media coverage. News releases were more effective than shareholder letters in shaping issue salience. As for stakeholder salience, the campaigns seemed to largely take their salience cues from the media.;The data provided mixed support for the classic agenda-setting hypothesis. A strong linkage was found between the media and investors (led by the media) for stakeholder salience, but only a weak to moderate linkage (with reciprocal influence) was found for issue salience. Candidate subsidies and investor opinion were significantly linked for issue salience (with reciprocal influence), but not for stakeholders. Releases were more effective than letters in shaping issue priorities among investors. Strong support was found for issue and stakeholder inter-candidate agenda-setting relationships among the competing campaigns. Finally, turning to agenda-setting consequences, this study revealed that the candidate with the stronger agenda-building and agenda-setting associations during a contest tended to win the election.;The theoretical and practical implications of these findings are discussed.