I don't recall how or where I came across this article by Levit and Malenkof, but.....

Nonbinding Voting for Shareholder Proposals

DORON LEVIT and NADYA MALENKO

Journal of Finance, October 2011

ABSTRACT

Shareholder proposals are a common form of shareholder activism. Voting for share-holder proposals, however, is nonbinding since management has the authority to reject the proposal even if it received majority support from shareholders. We analyze whether nonbinding voting is an e¤ective mechanism for conveying shareholder expectations. We show that, unlike binding voting, nonbinding voting generally fails to convey shareholder views when manager and shareholder interests are not aligned. Surprisingly, the presence of an activist investor who can discipline the manager may enhance the advisory role of nonbinding voting only if con‡icts of interest between shareholders and the activist are substantial.

According to the SEC Rule 14a-8, shareholders of a public company are permitted to submit a proposal to be voted on at the annual shareholder meeting. Unlike voting for management-initiated proposals, the resolutions of votes on shareholder-initiated proposals are nonbinding in the following sense: the company’'s board can make its own determination as to whether adoption of all or any part of a shareholder proposal is in the company’s best interests, even if the proposal received substantial majority support from shareholders.