Tag: independent board chair

ISS seeks comment on potential 2020 voting policy changes

ISS has opened the comment period on potential changes to its voting policies for 2020.  In the U.S., ISS is seeking comment on proposed changes related to sunset provisions for multi-class stock structures, share buybacks and shareholder proposals on independent board chairs.  Responses are due by October 18 at 5 p.m., E.T.

Study: What makes a good board chair?

In this article from the Harvard Business Review, “How to Be a Good Board Chair,” the author, an academic and consultant, discusses good practices for the board chair’s role based on a survey of 200 board chairs from 31 countries, 80 interviews with chairs and 60 interviews with board members, shareholders and CEOs.  According to the author, international differences notwithstanding, he “found a remarkable degree of agreement about what makes a good chair.”

BlackRock issues proxy voting guidelines for 2018 proxy season

As discussed in this PubCo post, BlackRock has recently issued its 2018 Proxy Voting Guidelines for U.S. Securities.  Because BlackRock is reportedly the largest asset management firm (with $6.3 trillion under management), its voting guidelines will matter to more than a few companies.  And BlackRock takes its proxy voting seriously. With the growth in index investing, CEO Laurence Fink has argued, asset managers’ responsibilities of engagement and advocacy have increased, given that asset managers cannot simply sell the shares of companies about which they have doubts if those companies are included in index funds.

Get used to it— “lap dog” may now be a favored adjective in shareholder proposals

From here on out, I guess you can count on seeing your directors described as “lap dogs” in some shareholder proposals or, more accurately, nascent or possible lap dogs. (That helps, doesn’t it?)  That’s because, in three separate shareholder proposals submitted to The Boeing Company by three beneficial owners (all working through John Chevedden), the SEC refused to allow the company to exclude portions of the supporting statements that suggested that some of the company’s directors might be “lap dogs.”

Framework developed by the Investor Stewardship Group establishes common set of investor expectations for corporate governance

The Investor Stewardship Group—a group of the largest, most prominent institutional investors and global asset managers investing, in the aggregate, over $20 trillion in the U.S. equity markets—has developed the Framework for U.S. Stewardship and Governance, a “framework of basic standards of investment stewardship and corporate governance for U.S. institutional investor and boardroom conduct.” The stewardship framework identifies fundamental responsibilities for institutional investors, and the corporate governance framework identifies six fundamental principles that “are designed to establish a foundational set of investor expectations about corporate governance practices in U.S. public companies. Generally, the principles “reflect the common corporate governance beliefs embedded in each member’s proxy voting and engagement guidelines,” although each ISG member may differ somewhat on specifics. The ISG encourages company directors to apply these basic principles—while acknowledging that they are not designed to be “prescriptive or comprehensive” and can be applied in various ways—and indicates that it will “evaluate companies’ alignment with these principles, as well as any discussion of alternative approaches that directors maintain are in a company’s best interests.” The framework does not go “into effect” until January 1, 2018, so that companies will have “time to adjust to these standards in advance of the 2018 proxy season,”  the implication being that failure to “comply or explain” by that point could ultimately lead to shareholder opposition during proxy season.  Check out the countdown clock at the link above!

ISS study shows board leadership structure affects CEO compensation

by Cydney Posner According to a new report from ISS, the structure of board leadership plays a significant role in relative levels of CEO compensation.  Combining the CEO and board chair titles is still the most prevalent leadership structure among S&P 500 companies, with 51% of companies combined the roles […]

Paper debunks seven board myths

by Cydney Posner In “Seven Myths of Boards of Directors,” two academics from Stanford Business School set about debunking some of the most common and persistent expectations regard best practices in board structure, composition and procedure.  The authors contend that these seven myths “are not substantiated by empirical evidence.”