This paper advances understanding of corporate governance relationship
s with a longitudinal study of multiple antitakeover options. Prior an
alyses have been primarily cross-sectional, focused exclusively on a s
ingle provision ignoring provisions which require subsequent stockhold
er approval. The current study uses agency theory, and broadens this p
erspective by examining the differential impact of institutional inves
tors' stockholding, managerial stock ownership, and corporate board ch
aracteristics on the rate of adoption of six provisions, including pro
visions which do and do not require stockholder approval. Results of h
azard analyses of the rate of amendment adoption of 185 firms between
1984 and 1988 indicate that the impact of governance variables on anti
takeover provisions differ depending on whether these actions require
stockholder approval or not. The pattern of differences indicates that
institutional investors use their voting power when they are given an
opportunity to vote and that substitution between direct shareholder
control and managerial stock ownership exists.