[8] We recognize that it may take time and that companies with smaller market capitalizations and in certain sectors may face more challenges in pursuing diversity. We will take the total number of board commitments across our global policies into account for director elections. A proxy voting advice business will be deemed to satisfy the requirements of Rule 14a-2 (b) (9) (ii) (A) if its written policies and procedures are reasonably designed to provide registrants with a copy of its proxy voting advice, at no charge, no later than the time it is disseminated to the businesss clients. Required fields are marked *, You may use these HTML tags and attributes: . We may vote against certain directors where changes to governing documents are not put to a shareholder vote within a reasonable period of time, particularly if those changes have the potential to impact shareholder rights (see Director elections). We note that majority voting may not be appropriate in all circumstances, for example, in the context of a contested election, or for majority-controlled companies or those with concentrated ownership structures. 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. Our publicly available commentary provides more information on our approach to climate risk and the global energy transition. We believe boards should aspire to meaningful diversity of membership, at least consistent with local regulatory requirements and best practices, while recognizing that building a strong, diverse board can take time. Companies should disclose the steps they are taking to advance diversity, equity, and inclusion; job categories and workforce demographics; and their responses to the U.S. In our view, director compensation packages that are based on the companys long-term value creation and include some form of long-term equity compensation are more likely to meet this goal. Individual proxy votes therefore will differ from these guidelines from time to time. 0000008767 00000 n
We may also support a pill where it is the only effective method for protecting tax or other economic benefits that may be associated with limiting the ownership changes of individual shareholders. 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. 0000005166 00000 n
We generally favor prompt recoupment from any senior executive whose compensation was based on faulty financial reporting or deceptive business practices. These guidelines are divided into eight key themes, which group together the issues that frequently appear on the agenda of shareholder meetings: An effective and well-functioning board is critical to the economic success of the company and the protection of shareholders interests, inducting the establishment of appropriate governance structures that facilitate oversight of management and the companys strategic initiatives. We will consider a variety of possible voting outcomes in contested situations, including the ability to support a mix of management and dissident nominees. Please refer to the member's contract benefits in effect at the time of service to determine coverage or non-coverage of these services as it applies to an individual member. We may consider comparable transaction analyses provided by the parties financial advisors and our own valuation assessments. (go back), 17https://www.blackrock.com/corporate/literature/whitepaper/bii-managing-the-net-zero-transition-february-2022.pdf(go back), 18While guidance is still under development for a unified disclosure framework related to natural capital, the emerging recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD), may prove useful to some companies. 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. The materials on this website are for illustration and discussion purposes only and do not constitute an offering. 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. 0000042951 00000 n
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. 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. Boards should disclose how the corporate governance structures adopted upon a companys initial public offering (IPO) are in shareholders best long-term interests. WebEXECUTIVE SUMMARY Policy Updates for 2023 W W W . This process may include internal board evaluations; however, boards may also find it useful to periodically conduct an assessment with a third party. A growing number of companies, financial institutions, as well as governments, have committed to advancing decarbonization in line with the Paris Agreement. We ask for disclosures to understand the timeframe and responsibilities of this role. Accordingly, shareholders should have the right to call a special meeting in cases where a reasonably high proportion of shareholders (typically a minimum of 15% but no higher than 25%) are required to agree to such a meeting before it is called. Where we determine that company is not appropriately considering their key stakeholder interests in a way that poses material financial risk to the company and its shareholders, we may vote against relevant directors or support shareholder proposals related to these topics. 0000110450 00000 n
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. RBC GAM subscribes to the research of both ISS and Glass, Lewis & Co . We note there may be cases in which the final vote recommendation at a particular company 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), 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. In exceptional circumstances and with sufficiently broad support, shareholders should have the opportunity to raise issues of substantial importance without having to wait for management to schedule a meeting. I S S G O V E R N A N C E . Among these smaller companies, we look for the presence of diversity and take into consideration the progress that companies are making. }mA$ffSDYnbN|d=,AHsNz8L s
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If the relevant standards are silent on the issue under consideration, we will use our professional judgment as to what voting outcome would best protect the long-term economic interests of investors. BIS will generally support annual advisory votes on executive compensation. The following table illustrates examples[5] of responsibilities under each board leadership model: Companies should have a robust CEO and senior management succession plan in place at the board level that is reviewed and updated on a regular basis. 0000012287 00000 n
(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. We generally do not support shareholder proposals seeking the reimbursement of proxy contest expenses, even in situations where we support the shareholder campaign. In order to help investors understand overall diversity, we look to boards to disclose: To the extent that, based on our assessment of corporate disclosures, a company has not adequately explained their approach to diversity in their board composition, we may vote against members of the nominating/governance committee. 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. BIS may support shareholder proposals requesting to put extraordinary benefits contained in supplemental executive retirement plans (SERP) to a shareholder vote unless the companys executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans. Boards should establish policies prohibiting the use of equity awards in a manner that could disrupt the intended alignment with shareholder interests, such as the excessive pledging or heading of stock. (go back), 14The ISSB has committed to build upon the SASB standards, which identify material, sustainability-related disclosures across sectors. 0000015236 00000 n
In the event of a proposal for are verse split that would not proportionately reduce the companys authorized stock, we apply the same analysis we would use for a proposal to increase authorized stock. There is growing consensus that companies can benefit from the more favorable macroeconomic environment under an orderly, timely, and equitable global energy transition. Price is a former Manager at Diligent. We also generally oppose plans that allow for repricing without shareholder approval. This structure should be aligned with shareholder interests, particularly the generation of sustainable, long-term value. These clauses also tend to specify that an all-cash bid for all shares that includes a fairness opinion and evidence of financing does not trigger the pill, but forces either a special meeting at which the offer is put to a shareholder vote or requires the board to seek the written consent of shareholders, where shareholders could rescind the pill at their discretion. It allows boards to have deeper discussions and make more resilient decisions. Nonetheless, in situations where there is a substantial or dominant shareholder, supermajority voting may be protective of minority shareholder interests, and we may support supermajority voting requirements in those situations. The integrity of financial statements depends on the auditor effectively fulfilling its role. We generally view the boards discretion to establish voting rights on a when-issued basis as a potential anti-takeover device, as it affords the board the ability to place a block of stock with an investor sympathetic to management, thereby foiling a takeover bid without a shareholder vote. 0000024781 00000 n
It is our view that well-run companies, where appropriate, effectively evaluate and manage material sustainability-related risks and opportunities[12] as a core component of their long-term value creation for shareholder and business strategy. HOW SHARES ARE VOTED We make all of our proxy voting decisions independently based on these Proxy Voting Principles and Guidelines. Before investing in any Dodge & Cox Fund, you should carefully consider the Fund's investment objectives, risks, and charges and expenses. 0000012069 00000 n
Additionally, we may oppose shareholder proposals requesting the right to act by written consent if the company already provides a shareholder right to call a special meeting that offers shareholders a reasonable opportunity to raise issues of substantial importance without having to wait for management to schedule a meeting. WebThe Proxy Committee may resolve such conflicts in any of a variety of ways, including without limitation the following: (i) voting in accordance with the Proxy Guidelines based We look for disclosures from companies to help us understand their approach and do not prescribe any particular board composition. This may not apply in cases where BIS did not support the initial vote against such board member(s), The Independent Chair or Lead Independent Director and/or members of the nominating/governance committee, where a board fails to consider shareholder proposals that (1) receive substantial support, and (2) in our view, have a material impact on the business, shareholder rights, or the potential for long-term value creation, Appears to have a legitimate financing motive for requesting blank check authority, Has committed publicly that blank check preferred shares will not be used for anti-takeover purposes, Has a history of using blank check preferred stock for financings, Has blank check preferred stock previously outstanding such that an increase would not necessarily provide further anti-takeover protection but may provide greater financing flexibility, The degree to which the proposed transaction represents a premium to the companys trading price. At the board level, appropriate governance structures and responsibilities allow for effective oversight of the strategic implementation of material sustainability issues. We will evaluate the actions that the company has taken to limit shareholders ability to exercise the right to nominate dissident director candidates, including those actions taken absent the immediate threat of a contested situation. 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. 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. Companies should have an established process for identifying, monitoring, and managing business and material risks. As noted above, highly qualified, engaged directors with professional characteristics relevant to a companys business enhance the ability of the board to add value and be the voice of shareholders in board discussions. Where we find that shareholder protections are diminished, we may support reincorporation if we determine that the overall benefits outweigh the diminished rights. The views and strategies described may not be suitable for all investors. (go back), 13The International Financial Reporting Standards (IFRS) Foundation announced in November 2021 the formation of an International Sustainability Standards Board (ISSB) to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors information needs. h{HSQsusVbf+[2R0J3-\e.Q75)(1YFNB8Z3PmFup}9 @ 834H>$@bj6DQjqgd
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Our publicly available commentary provides more information on our approach. Compensation for directors should generally be structured to attract and retain directors, while also aligning their interests with those of shareholders. 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. 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. Past performance is no guarantee of future results. There are two commonly accepted structures for independent leadership to balance the CEO role in the boardroom: 1) an independent Chair; or 2) a Lead Independent director when the roles of Chair and CEO are combined, or when the Chair is otherwise not independent. We generally think that a right to act via written consent is not a sufficient alternative to the right to call a special meeting. BIS recognizes the critical importance of financial statements to provide a complete and accurate portrayal of a companys financial condition. [6] In our experience, greater diversity in the boardroom contributes to more robust discussions and more innovative and resilient decisions. 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. 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. trailer
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We consider the share price over multiple time periods prior to the date of the merger announcement. An EGC should have an independent audit committee by the first anniversary of its IPO, with our standard approach to voting on auditors and audit-related issues applicable in full for an EGC on the first anniversary of its IPO. Equal Employment Opportunity Commissions EEO-1 Survey. 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. MFS Proxy Voting Committee. Where a company has not adequately demonstrated, through actions and/or disclosures, how material issues are appropriately identified, managed, and overseen, we will consider voting against the re-election of those directors responsible for the oversight of such issues, as indicated below. 0000004677 00000 n
Governance is the core means by which boards can oversee the creation of durable, long-term value. 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. As such, DWSs authority and responsibility to vote such proxies depend upon its contractual relationships with its clients or other delegated authority. DWS has delegated responsibility for effecting its advisory clients proxy votes to Institutional Shareholder Services (ISS), an independent thirdparty proxy voting specialist. Where the company already has a sufficiently robust majority voting process in place, we may not support a shareholder proposal seeking an alternative mechanism. Foreign investing, especially in developing countries, has special risks such as currency and market volatility and political In assessing mergers, acquisitions, or other transactions including business combinations involving Special Purpose Acquisition Companies (SPACs) BIS primary consideration is the long-term economic interests of our clients as shareholders. Many companies have an opportunity to use and contribute to the development of low carbon energy sources and technologies that will be essential to decarbonizing the global economy over time. I. Finally, pension contributions and other deferred compensation arrangements should be reasonable in light of market practices. Board Management for Education and Government, Internal Controls Over Financial Reporting (SOX), statement in 2018 by Keith Johnson and Cynthia Williams. We typically support shareholder proposals on these matters unless the company already has a robust clawback policy that sufficiently addresses our concerns. Common circumstances are illustrated below: Directors should generally be elected by a majority of the shares voted. We look to companies to disclose short-, medium-, and long-term targets, ideally science-based targets where these are available for their sector, for Scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how their targets are consistent with the long-term economic interests of their shareholders. The proposal should give unaffiliated shareholders the opportunity to affirm the current structure or establish mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs to shareholders. Institutional Shareholder Services (ISS) and Glass Lewis, the leading proxy advisors in the United States, have announced updates and clarifications for their voting guidelines for the 2022 proxy season. Review recommendations for proxies where the Guidelines specify that the issues are to be determined on a caseby--case basis and ensure such proxies are voted in accordance with these Policies and Guidelines; and Monitoring Proxy Vendor Oversights proxy voting activities (see below). BIS generally supports proposals to seek exclusive forum for certain shareholder litigation. BIS will generally not support these proposals. Centralize the data you need to set and surpass your ESG goals., The Big Shift: How Boardrooms Are Evolvingand How Leaders Should Respond. In general, we support market-standardized proxy access proposals, which allow a shareholder (or group of up to 20 shareholders) holding three percent of a companys outstanding shares for at least three years the right to nominate the greater of up to two directors or 20% of the board. However, once an item comes to a shareholder vote, we uphold our fiduciary duty to vote in the best long-term interests of our clients, where we are authorized to do so. 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. At a minimum, we expect companies to disclose their Scopes 1 and 2 greenhouse gas (GHG) emissions, 1 as investors need this information to That diversity can enable companies to develop businesses that more closely reflect and resonate with the customers and communities they serve. We hold members of the compensation committee, or equivalent board members, accountable for poor compensation practices and/or structures. We generally view golden parachutes as encouragement to management to consider transactions that might be beneficial to shareholders. As discussed more fully below in Section D of this Policy, depending on the proposal, an Approved Guideline may provide that Lazard should vote for or 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. Dodge & Cox Funds are distributed by Foreside Fund Services, LLC, which is not affiliated with Dodge & Cox. We will consider whether the transaction involves a dissenting board or does not appear to be the result of an arms-length bidding process. Conversely, we note that some shareholder proposals seek to address topics that are clearly within the purview of certain stakeholders. Please read the prospectus and summary prospectus carefully before investing. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investments are not FDIC-insured, nor are they deposits of or guaranteed by any bank or any other entity. In the absence of robust disclosures, we may reasonably conclude that companies are not adequately managing risk. These roles and responsibilities should be disclosed and easily accessible. (go back), 16For example, BlackRocks Capital Markets Assumptions anticipate 25 points of cumulative economic gains over a 20-year period in an orderly transition as compared to the alternative. We will normally support proposals seeking to introduce bylaws requiring a majority vote standard for director elections. If you have received an invitation, you must first create a login by following the link provided in Use of this site signifies that you accept ourTerms & Conditions of Use. 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. 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. Their voting recommendations on annual meeting proposals influence many institutional investors and play an important role in voting While we will typically support proposals requesting board de-classification, we may make exceptions, should the board articulate an appropriate strategic rationale for a classified board structure. Stay on the $country-name$ $persona-name$ site. Proxy Voting Guidelines: TRPIM. Web the criteria for the active exercise of voting rights are clearly regulated; conflicts of interest are identified and addressed. WebProxy voting is a key climate-risk management tool and part of our stewardship-escalation process. Environmental, Social, and Governance (ESG) Integration. 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. 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. day & year Home Owner(s) Signature: _____ Date: _____ This form must be presented during the However, a large potential payout under a golden parachute arrangement also presents the risk of motivating a management team to support a sub-optimal sale price for a company. This better macro environment will support better economic growth, financial stability, job growth, productivity, as well as ecosystem stability and health outcomes. These may include instances where shareholders nominate director candidates, oppose the view of management and/or the board on mergers, acquisitions, or other transactions, etc. The board should exercise appropriate oversight of management and the business activities of the company. Diversification and asset allocation do not ensure a profit or guarantee against loss. From time to time, shareholder proposals may be presented to promote auditor independence or the rotation of audit firms. We engage an outside advisor to make initial, customized recommendations based on these Proxy Voting Principles and Guidelines. 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]. During a CEO transition, companies may elect for the departing CEO to maintain a role in the boardroom. We encourage disclosures aligned with the reporting framework developed by the Task Force on Climate related Financial Disclosures (TCFD), supported by industry-specific metrics, such as those identified by the Sustainability Accounting Standards Board (SASB), now part of the International Sustainability Standards Board (ISSB) under the International Financial Reporting Standards (IFRS)Foundation. We encourage companies to ensure that their compensation plans incorporate appropriate and rigorous performance metrics, consistent with corporate strategy and market practice. Weball proxies based on the RBC GAM Proxy Voting Guidelines . 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renaissance technologies proxy voting guidelines
