In an important change for newly public companies When presented with shareholder proposals requesting increased disclosure on corporate political activities, BIS will evaluate publicly available information to consider how a companys lobbying and political activities may impact the company. WebName of proxy vote by the homeowners association during the _____ meeting. [6] In our experience, greater diversity in the boardroom contributes to more robust discussions and more innovative and resilient decisions. However, in these instances, boards should periodically review the rationale for a classified structure and consider when annual elections might be more appropriate. Where compensation structures provide for a front-loaded[10] award, we look for appropriate structures (including vesting and/or holding periods) that motivate sustained performance for shareholders over a number of years. h{HSQsusVbf+[2R0J3-\e.Q75)(1YFNB8Z3PmFup}9 @ 834H>$@bj6DQjqgd +E%}#g}Zc[R)FaBvqn[]mS5Wvz>t0AbTF[Rtn&Q6vR _Wlz{N45]f&bg~hh59 FT ^#_gzM6D~f6*.km)[Ng0NBP4+\7&mG(3WkELFYP?R Streamline your next board meeting by collating and collaborating on agendas, documents, and minutes securely in one place. 0000006004 00000 n We depend on companies to provide accessible and clear disclosures so that investors can easily understand how their political activities support their long-term strategy, including on stated public policy priorities. We may oppose shareholder proposals requesting the right to act by written consent in cases where the proposal is structured for the benefit of a dominant shareholder to the exclusion of others, or if the proposal is written to discourage the board from incorporating appropriate mechanisms to avoid the waste of corporate resources when establishing a right to act by written consent. [13] While the TCFD framework was developed to support climate-related risk disclosures, the four pillars of the TCFD governance, strategy, risk management, and metrics and targets are a useful way for companies to disclose how they identify, assess, manage, and oversee a variety of sustainability-related risks and opportunities. (go back), 9Special situations are broadly defined as events that are non-routine and differ from the normal course of business for a companys shareholder meeting, involving a solicitation other than by management with respect to the exercise of voting rights in a manner inconsistent with managements recommendation. We will also evaluate whether there is general consistency between a companys stated positions on policy matters material to their strategy and the material positions taken by significant industry groups of which they are a member. We use third party research, in addition to our own analysis, to evaluate existing and proposed compensation structures. BIS generally supports proposals to seek exclusive forum for certain shareholder litigation. jxD NyA%oIL.Mr`sjk BCy +MX |. |_j l3 endstream endobj 2075 0 obj <>/Filter/FlateDecode/Index[347 1689]/Length 63/Size 2036/Type/XRef/W[1 2 1]>>stream When voting on a management or shareholder proposal to make changes to the charter/articles/bylaws, we will consider in part the companys and/or proponents publicly stated rationale for the changes; the companys governance profile and history; relevant jurisdictional laws; and situational or contextual circumstances which may have motivated the proposed changes, among other factors. (go back), Your email is never published nor shared. This may include when a company needs consistency and stability during a time of transition, e.g., newly public companies or companies undergoing a strategic restructuring. Without a voting mechanism to immediately address concerns about a specific director, we may choose to vote against the directors up for election at the time (see Shareholder rights for additional detail). H\n0E The integrity of financial statements depends on the auditor effectively fulfilling its role. We ask for disclosures to understand the timeframe and responsibilities of this role. We may oppose plans that provide for the acceleration of vesting of equity awards even in situations where an actual change of control may not occur. Where we believe a companys disclosures or practices fall short relative to the market or peers, or we are unable to ascertain the board and managements effectiveness in overseeing related risks and opportunities, we may vote against members of the appropriate committee or support relevant shareholder proposals. Our view of independence may vary from listing standards. (go back), 3A BDC is a special investment vehicle under the Investment Company Act of 1940 that is designed to facilitate capital formation for small and middle-market companies(go back), 4CTo this end, we do not view shareholder proposals asking for the separation of Chair and CEO to be a proxy for other concerns we may have at the company for which a vote against directors would be more appropriate. On November 11, 2019, Institutional Shareholder Services (ISS) released its 2020 Proxy Voting Guidelines, which are generally effective for meetings on or after February 1, 2020. Consistent with our approach to voting on directors, we seek to hold the audit committee of the board responsible for overseeing the management of the independent auditor and the internal audit function at a company. Please read the prospectus and summary prospectus carefully before investing. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Introducing the possibility of such reimbursement may incentivize disruptive and unnecessary shareholder campaigns. We typically support shareholder proposals on these matters unless the company already has a robust clawback policy that sufficiently addresses our concerns. We look to understand a boards diversity in the context of a companys domicile, market capitalization, business model, and strategy. Join Lisa Edwards, Diligent President and COO, and Fortune Media CEO Alan Murray to discuss how corporations' role in the world has shifted - and how leaders can balance the risks and opportunities of this new paradigm. We will consider whether the transaction involves a dissenting board or does not appear to be the result of an arms-length bidding process. Proxy Voting Guidelines 2022. These guidelines are also intended to inform all investors on how to vote in an ESG-aligned way. Where we determine that a board has failed to do so in a way that may impede a companys long-term value, we may vote against the responsible committees and/or individual directors. Diversification and asset allocation do not ensure a profit or guarantee against loss. BIS will also consider the average board tenure to evaluate processes for board renewal. As stated above, a majority vote standard is generally in the best long-term interests of shareholders, as it ensures director accountability through the requirement to be elected by more than half of the votes cast. Equal Employment Opportunity Commissions EEO-1 Survey. We evaluate a number of factors, which may include: the qualifications and past performance of the dissident and management candidates; the validity of the concerns identified by the dissident; the viability of both the dissidents and managements plans; the ownership stake and holding period of the dissident; the likelihood that the dissidents strategy will produce the desired change; and whether the dissident represents the best option for enhancing long-term shareholder value. In cases where a boards unilateral adoption of changes to the charter/articles/bylaws promotes cost and operational efficiency benefits for the company and its shareholders, we may support such action if it does not have a negative effect on shareholder rights or the companys corporate governance structure. This makes it possible to elect local Scope The guiding principle of this Policy is that voting rights should be exercised and BIS will generally not support these proposals. We may also consider whether executive and/or board members financial interests appear likely to affect their ability to place shareholders interests before their own, as well as measures taken to address conflicts of interest, We prefer transaction proposals that include the fairness opinion of a reputable financial advisor assessing the value of the transaction to shareholders in comparison to recent similar transactions, Whether we determine that the triggering event is in the best interests of shareholders, Whether management attempted to maximize shareholder value in the triggering event, The percentage of total premium or transaction value that will be transferred to the management team, rather than shareholders, as a result of the golden parachute payment, Whether excessively large excise tax gross-up payments are part of the pay-out, Whether the pay package that serves as the basis for calculating the golden parachute payment was reasonable in light of performance and peers, Whether the golden parachute payment will have the effect of rewarding a management team that has failed to effectively manage the company, The company has experienced significant stock price decline as a result of macroeconomic trends, not individual company performance, Directors and executive officers are excluded; the exchange is value neutral or value creative to shareholders; tax, accounting, and other technical considerations have been fully contemplated, There is clear evidence that absent repricing, employee incentives, retention, and/or recruiting may be impacted, Disclose the identification, assessment, management, and oversight of material sustainability related risks and opportunities in accordance with the four pillars of TCFD, Publish material, investor-relevant, industry-specific metrics and rigorous targets, aligned with SASB (ISSB) or comparable sustainability reporting standards. They are to be applied with discretion, taking into consideration the range of issues and facts specific to the company, as well as individual ballot items at shareholder meetings. In our view, an informative indicator of diversity for such companies is having at least two women and a director who identifies as a member of an underrepresented group. When evaluating these awards, we consider a variety of factors, including the magnitude and structure of the award, the scope of award recipients, the alignment of the grant with shareholder value, and the companys historical use of such awards, in addition to other company-specific circumstances. We frequently oppose proposals requesting authorization of a class of preferred stock with unspecified voting, conversion, dividend distribution, and other rights (blank check preferred stock) because they may serve as a transfer of authority from shareholders to the board and as a possible entrenchment device. 2. These activities can also create risks, including: the potential for allegations of corruption; certain reputational risks; and risks that arise from the complex legal, regulatory, and compliance considerations associated with corporate political spending and lobbying activity. Q (xIP,O# Appropriate risk oversight of business-relevant and material sustainability-related considerations is a component of a sound governance framework. WebInvesting involves risk, including possible loss of principal. 1 Proxy Voting by Investment Advisers, Release No. Companies should disclose the rationale for their selection of primary listing, country of incorporation, and choice of governance structures, particularly where there is conflict between relevant market governance practices. 0000013449 00000 n hA vRW|d'XDsx9sx9 & endstream endobj 2037 0 obj <>/Metadata 345 0 R/Names 2038 0 R/Outlines 121 0 R/Pages 339 0 R/StructTreeRoot 347 0 R/Type/Catalog/ViewerPreferences<>>> endobj 2038 0 obj <> endobj 2039 0 obj >/PageTransformationMatrixList<0[1.0 0.0 0.0 1.0 -306.0 -396.0]>>/PageUIDList<0 544>>/PageWidthList<0 612.0>>>>>>/Resources<>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/StructParents 0/Thumb 307 0 R/TrimBox[0.0 0.0 612.0 792.0]/Type/Page>> endobj 2040 0 obj <> endobj 2041 0 obj <>stream To that end, we favor an independent auditor. We generally support reverse stock splits that are designed to avoid delisting or to facilitate trading in the stock, where the reverse split will not have a negative impact on share value (e.g., one class is reduced while others remain at pre-split levels). Academic and other research reveals correlations between specific dimensions of diversity and effects on decision-making processes and outcomes. 0000012767 00000 n WebRanked-Choice Voting (also known as instant runoff voting) allows voters to rank a first, second and third choice candidate for a single office. Mizoram faces the second wave of covid-19 with the bravery of local heroes, ZMC Medical Students Drowned In Tuirivang, Nursing Student Volunteers Herself to Work at ZMC, Perpetrator responsible for tank lorry fire arrested, Mizoram Olympic Association delegates set off for NorthEast Olympic Games 2022, Thingsulthliah PHC Staff Nurse receives Florence Nightingale Award. Companies should also disclose any material supranational standards adopted, the industry initiatives in which they participate, any peer group benchmarking undertaken, and any assurance processes to help investors understand their approach to sustainable and responsible business conduct. While we believe special awards[11] should be used sparingly, we acknowledge that there may be instances when such awards are appropriate. The most common form of ESPP qualifies for favorable tax treatment under Section 423of the Internal Revenue Code. As a best practice, companies with either a majority vote standard or a plurality vote standard should adopt a resignation policy for directors who do not receive support from at least a majority of votes cast. I S S G O V E R N A N C E . BIS will generally support annual advisory votes on executive compensation. Where we determine that a board has not acted in the best interests of the companys shareholders, or takes action to unreasonably limit shareholder rights, we may vote against the appropriate committees and/or individual directors. At this stage, we view Scope 3 emissions differently from Scopes 1 and 2, given methodological complexity, regulatory uncertainty, concerns about double-counting, and lack of direct control by companies. We take particular note of cases involving significant financial restatements or material weakness disclosures, and we look for timely disclosure and remediation of accounting irregularities. In the event that the board chooses to have a combined Chair/CEO or a non-independent Chair, we support the designation of a Lead Independent director, with the ability to: 1) provide formal input into board meeting agendas; 2) call meetings of the independent directors; and 3) preside at meetings of independent directors. Board Management for Education and Government, Internal Controls Over Financial Reporting (SOX), statement in 2018 by Keith Johnson and Cynthia Williams. We also ask boards to conduct a regular review of corporate governance and control structures, such that boards might evolve foundational corporate governance structures as company circumstances change, without undue costs and disruption to shareholders. Lastly, we look for shareholder approval of poison pill plans within one year of adoption of implementation. WebIn the first half of 2022, we updated our proxy voting guidelines to enhance our commitments in three key areas: Board diversity, climate-related accountability, and cross-shareholding. C O M 6 of 17 Upcoming Milestones Early-Mid December: Publication of all updated ISS benchmark policies (proxy voting guidelines) for 2023 on ISS website. Their voting recommendations on annual meeting proposals influence many institutional investors and play an important role in voting It is our view that long-term shareholders should have the opportunity, when necessary and under reasonable conditions, to nominate directors on the companys proxy card.[19]. IA-2106, at n. 2 and accompanying text (Jan. 31, 2003) (Proxy Voting Release), citing SEC v. Capital Gains WebThis Renaissance Technologies website (www.renfund.com) is by invitation only. BIS recognizes that climate change can be challenging for many companies, as they seek to drive long-term value by mitigating risks and capturing opportunities. In addition, to the extent that an auditor fails to reasonably identify and address issues that eventually lead to a significant financial restatement, or the audit firm has violated standards of practice, we may also vote against ratification. Where a standardized proxy access provision exists, we will generally oppose shareholder proposals requesting outlier thresholds. For companies facing insolvency or bankruptcy, a premium may not apply, There should be clear strategic, operational, and/or financial rationale for the combination, Unanimous board approval and arms-length negotiations are preferred. We generally support management proposals to convert to a PBC if our analysis indicates that shareholders interests are adequately protected. We encourage companies to disclose how their capital allocation to various energy sources is consistent with their strategy. (go back), 15The global aspiration to achieve a net-zero global economy by 2050 is reflective of aggregated efforts; governments representing over 90% of GDP have committed to move to net-zero over the coming decades. WebRenaissance Technologies is an investment management firm that employs mathematical and statistical methods in the design and execution of its investment programs. Common circumstances are illustrated below: In addition, we recognize that board leadership roles may vary in responsibility and time requirements in different markets around the world. 0000033560 00000 n 0000042449 00000 n In determining how to vote on behalf of clients who have authorized us to do so, we look to companies only to address issues within their control and do not anticipate that they will address matters that are the domain of public policy. 0000014951 00000 n As a result, BlackRock will generally not participate in consent solicitations or related processes. The Assam Rifles - Friends of the Hill People? WebCanada Proxy Voting Guidelines for TSX-listed Companies; Canada Proxy Voting Guidelines for Venture Companies; Canada Advance Notice Requirements FAQ; 'Td9m by]Z`!,RsLfX f i,^ptO+P7,CO }mT/>E9( Where a poison pill is put to a shareholder vote by management, our policy is to examine these plans individually. During a CEO transition, companies may elect for the departing CEO to maintain a role in the boardroom. BIS supports equity plans that align the economic interests of directors, managers, and other employees with those of shareholders. Before investing in any Dodge & Cox Fund, you should carefully consider the Fund's investment objectives, risks, and charges and expenses. Companies that build strong relationships with their key stakeholders are more likely to meet their own strategic objectives, while poor relationships may create adverse impacts that expose a company to legal, regulatory, operational, and reputational risks. To signal our concerns, we may also vote against the chair of the nominating/governance committee, or where no chair exists, the nominating/governance committee member with the longest tenure. BIS may take voting action against directors (up to and including the full board) where those actions are viewed as egregiously infringing on shareholder rights. We generally favor a simple majority voting requirement to pass proposals. These guidelines should be read in conjunction with the BlackRock Investment Stewardship Global Principles. 0000004157 00000 n While these meetings have traditionally been conducted in-person, virtual meetings are an increasingly viable way for companies to utilize technology to facilitate shareholder accessibility, inclusiveness, and cost efficiencies. Where a company has failed to implement a Say on Pay advisory vote within the frequency period that received the most support from shareholders or a Say on Pay resolution is omitted without explanation, BIS may vote against members of the compensation committee. These guidelines are divided into eight key themes, which group together the issues that frequently appear on the agenda of shareholder Foreign investing, especially in developing countries, has special risks such as currency and market volatility and political and social instability. Self identified board demographic diversity can usefully be disclosed in aggregate, consistent with local law. We generally support stock splits that are not likely to negatively affect the ability to trade shares or the economic value of a share. 0000015236 00000 n Webguidelines are based on a commitment to create and preserve economic value and to advance principles of good corporate governance. BIS recognizes the critical importance of financial statements to provide a complete and accurate portrayal of a companys financial condition. All Rights Reserved. (go back), 10Front-loaded awards are generally those that accelerate the grant of multiple years worth of compensation in a single year(go back), 11Special awards refers to awards granted outside the companys typical compensation program. SASB Standards can be used to provide a baseline of investor-focused sustainability disclosure and to implement the principles-based framework recommended by the TCFD, which is also incorporated into the ISSBs Climate Exposure Draft. In such instances, we typically look for the board to have appropriate independent leadership structures in place. Common impediments to independence may include: We may vote against directors who we do not consider to be independent, including at controlled companies, when we believe oversight could be enhanced with greater independent director representation. The board should exercise appropriate oversight of management and the business activities of the company. In cases where there is a Say on Pay vote, BIS will respond to the proposal as informed by our evaluation of compensation practices at that particular company and in a manner that appropriately addresses the specific question posed to shareholders. While stakeholder groups may vary across industries, they are likely to include employees; business partners (such as suppliers and distributors); clients and consumers; government and regulators; and the constituents of the communities in which a company operates. Corporate Governance Management teams of companies are accountable to the boards of directors and directors of publicly held companies are accountable to shareholders. Sandy Boss is Global Head of Investment Stewardship, John Roe is Head of Investment Stewardship (BIS) in the Americas, and Jessica McDougall is a Director at BlackRock Inc. These disclosures should also include the accountability and voting mechanisms that would be available to shareholders. 0000015446 00000 n Our publicly available commentary provides more information on our approach to natural capital. 0000002522 00000 n Companies with multiple share classes should receive shareholder approval of their capital structure on a periodic basis via a management proposal on the companys proxy. 0000024740 00000 n Clear and consistent disclosures on these matters are critical for investors to make an informed assessment of a companys HCM practices. However, the final voting decision is independent and voting authority rests Rather, support for such a proposal might arise in the case of overarching and sustained governance concerns such as lack of independence or failure to oversee a material risk over consecutive years(go back), 5This table is for illustrative purposes only. Companies may engage in certain political activities, within legal and regulatory limits, in order to support public policy matters material to the companies long-term strategies. WebVoting Guidelines set forth in Appendix A of Calverts Proxy Voting Policies and Procedures and the proxy voting guidelines discussed in this section do not apply to such ETFs. [4] However, BIS may vote against the most senior non-executive member of the board when appropriate independence is lacking in designated leadership roles. Boards should clearly explain the economic and strategic rationale for any proposed transactions or material changes to the business. We will evaluate these disclosures to inform our view of how a company is managing material nature-related risks and opportunities, as well as in our assessment of relevant shareholder proposals. Review details of firms position on all major proxy voting issues. Therefore, we will generally support the reduction or the elimination of supermajority voting requirements to the extent that we determine shareholders ability to protect their economic interests is improved.
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