Companies that have long battled the prolific John Chevedden group on corporate governance shareholder proposals, as first noted on theCorporateCounsel.net proxy season blog, may be heartened to hear — or maybe not—that some members of the group are changing their focus.
As group member James McRitchie reports, to date, the group has focused entirely on corporate governance issues because of the group’s belief that companies that were more “democratic” would be more “likely to listen to their shareholders on other issues as well. Democracies facilitate voice and the exchange of ideas. Fighting for environmental and social issues, while extremely important, felt like addressing symptoms, rather than root causes.” To the extent that some of the group’s governance-related proposals were ultimately not submitted—for example, because they were excluded under the Rule 14a-8(i)(9) exclusion for conflicting proposals using the approach of “ratification” of existing provisions (see this PubCo post and this PubCo post), an approach that McRitchie views as “underhanded”—McRitchie indicates that the group may resubmit those proposals for another go-around. McRitchie also celebrates the recently announced position of Glass Lewis to vote against board members where companies have taken the ratification approach and, presumably, he is similarly elated by ISS’s comparable position. (See this PubCo post and this PubCo post.)
However, McRitchie announces, he and his wife, Myra Young, will now turn their attention to collaborations with the organizations As You Sow and the Center for Political Accountability as proponents for shareholder proposals on environmental, social and political spending issues. He advises that John Chevedden and Kenneth Steiner are also expected to “broaden their focus” this proxy season, but will still continue to pursue their corporate governance objectives, so don’t expect those corporate governance proposals to disappear altogether.