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of management proposals. This is also equivalent to voting against shareholder proposals given the fact that management always takes a position against shareholder sponsored proposals. [8] Given the importance of the effect of the ISS advice, I divide each proposal type according to whether the ISS endorses it or not and according to who sponsors the proposal (ISS favorable management proposals, ISS unfavorable management proposals, ISS favorable shareholder proposals, and ISS unfavorable shareholder proposals).

Panel A of Table 1 shows that for the ISS favorable management sponsored proposals, fund families uniformly vote in favor of management 78% of the time and uniformly vote against management 11% of the time. The divergence in fund votes within the family is, on average, 11%. Interestingly, individual funds show the greatest divergence (50%) surrounding the issue of Declassify the Board of Director, known as one of the most significant value reducing effects. Compensation related proposals such as Approve Omnibus Stock Plan, Amend Omnibus Stock Plan, and Amend Stock Option Plan have the next highest level of divergence as well as the next highest frequency.

For the ISS unfavorable management proposal at in Panel B of Table 1, funds uniformly vote against management 64% of the time and vote for management 19% of the time. The average divergence of funds within fund families is registered at 17%. Unlike previous studies, I observed a non-trivial voting divergence among funds within a fund family. Compensation related proposals (Approve Omnibus Stock Plan, Amend Omnibus Stock Plan, and Amend Stock Option Plan) are again the most frequently occurring types of proposals.

Panel C of Table 1 shows that for the ISS favorable shareholder sponsored proposal types, funds are less likely to vote uniformly within families, compared to management sponsored proposals. On average, funds in a family vote identically on 73% of the proposals while votes of funds in a family differ in 27% of the proposals. Board related proposals (Require a Majority Vote for the Election of Directors and Declassify the Board of Directors) are the most common shareholder sponsored proposals. Compensation related proposals (Expense Stock Options and Performance- Based/Indexed Options) have the next highest divergence as well as the next highest occurrence.

Table 2 presents the number of and the percentage of business ties of funds families with pension ties to the any of the sample firms and fund families without any pension ties. It also shows the number of proposals for which fund families cast their votes. The top five mutual funds families with business ties are Fidelity Investment, John Hancock Funds, Vanguard Group, SSGA Funds, and Oppenheimer Funds/MassMutual, and these families account for 35.8% of ties in the sample. The top 15 fund families account for 67.6% of pension ties, which is more than twice the level of pension ties of the next 50 fund families managing any pension assets of the sample firms. As shown in Panel B of Table 2, Jackson National, Thrivent Investment Management, USAA, and Munder Funds cast their vote on more than 200 proposals while these families do not engage in any pension business to any firm in my sample.

Given the findings of in the previous literature showing that firm characteristics affect how institutional investors vote, I include firm characteristics suc