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d as follows: the next section reviews background; section III describes the sample data; section IV shows the empirical results; section V concludes the paper.

背景II. BACKGROUND

Conflicts of interest of mutual funds induced by pension plan business

While institutional investors have grown in size and number over the last few decades, whether they play an appropriate monitoring role in corporate governance is still being debated. One possible method to reveal whether institutions exert effort in the monitoring of corporate governance is by examining proxy voting, because proxy voting is one of the primary mechanisms through which shareholders participate in corporate governance. Through management sponsored proposals, corporate management seeks approval of new and existing policies from shareholders. Likewise, through shareholder sponsored proposals, shareholders advocate changes in corporate policies. Brickley, et al. (1988) examine how large shareholders vote on management sponsored proposals for antitakeover amendment provisions during the 1984 proxy season, and they find that institutional investors are more likely to cast their votes against these proposals. While institutional investors might have greater incentives to participate in monitoring management than do small shareholders, the incentives of all institutional investors are not necessarily the same, and there may be conflicts of interest. With respect to proxy voting, all institutional investors will not necessarily vote against management, even if they believe it will maximize share value. Some institutional investors may choose to vote for management strategically in order to facilitate business ties with companies they own.

According to Pozen (2011), among institutional investors, mutual funds are the largest equity holders in the United States. Mutual funds have a fiduciary responsibility to act in the best interests of the fund owners. By sponsoring or supporting value-enhancing shareholder proposals and preventing value-destroying management proposals, mutual funds can influence corporate governance to maximize firm value in order to benefit shareholders. However, there is some evidence that mutual funds do not perform their fiduciary duties due to conflicts of interest. Mutual funds are able to benefit from pension fund business such as managing the 401(K) plans of their portfolio companies, providing the financial incentive for mutual funds to support management regardless of the best interests of fund owners. Cohen and Schmidt (2008) explain why being the trustee of a large 401(K) plan is attractive for mutual fund families: (1) the trustee fund family guarantees a large initial inflow invested in family funds, (2) the family receives additional inflows in retirement assets from employee savings each year, and (3) trustees of 401(K) plans rarely change.

The empirical evidence that conflicts of interest for mutual funds have effects on proxy voting is as follows. Davis and Kim (2007) analyze conflicts of interest in proxy voting by mutual funds using aggregate voting outcomes and find that fund families with pension business ties are more likely to vote with management compared to fund families without pension business ties. Moreover, by using records of actual mutual fund voting patterns on shareholder proposals, the authors compare mutual fund voting outcomes at firms in wh