Price is a former Manager at Diligent. [4] However, BIS may vote against the most senior non-executive member of the board when appropriate independence is lacking in designated leadership roles. We recognize that some companies may report using different standards, which may be required by regulation, or one of a number of private standards. Foreign investing, especially in developing countries, has special risks such as currency and market volatility and political Diversification and asset allocation do not ensure a profit or guarantee against loss. 0000001137 00000 n This site is for persons in the United States only. Equal Employment Opportunity Commissions EEO-1 Survey. Independent directors should have access to relevant management information and outside advice, as appropriate, to ensure they can properly oversee risk. Proxy Voting Policy . 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. In an important change for newly public companies WebProxy Voting Guidelines. 0000002073 00000 n Where we conclude that a company has failed to align pay with performance, we will vote against the management compensation proposal and relevant compensation committee members. 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. We encourage boards to disclose their approach to evaluations, including objectives of the evaluation; if an external party conducts the evaluation; the frequency of the evaluations; and, whether that evaluation occurs on an individual director basis. While we believe special awards[11] should be used sparingly, we acknowledge that there may be instances when such awards are appropriate. 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 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. 0000013250 00000 n Compensation committees should guard against contractual arrangements that would entitle executives to material compensation for early termination of their contract. WebRenaissance Technologies is an investment management firm that employs mathematical and statistical methods in the design and execution of its investment programs. Dodge & Cox Funds are distributed by Foreside Fund Services, LLC, which is not affiliated with Dodge & Cox. 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 favor prompt recoupment from any senior executive whose compensation was based on faulty financial reporting or deceptive business practices. He has worked extensively in the governance space, particularly on the key governance technologies that can support leadership with the visibility, data and operating capabilities for more effective decision-making. [17] Many companies are asking what their role should be in contributing to an orderly and equitable transitionin ensuring a reliable energy supply and energy security and in protecting the most vulnerable from energy price shocks and economic dislocation. Streamline your next board meeting by collating and collaborating on agendas, documents, and minutes securely in one place. In the absence of robust disclosures, we may reasonably conclude that companies are not adequately managing risk. Conversely, we note that some shareholder proposals seek to address topics that are clearly within the purview of certain stakeholders. 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. 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. 1. These guidelines provide an overview of how ISS approaches proxy voting issues for subscribers of the Sustainability Policy. 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. 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. 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. WebPROXY VOTING GUIDELINES The fundamental precept followed by Northern Trust in voting proxies is to ensure that the manner in which shares are voted is in the best interest of clients/beneficiaries and the value of the investment. 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. Clear and consistent disclosures on these matters are critical for investors to make an informed assessment of a companys HCM practices. We typically support shareholder proposals on these matters unless the company already has a robust clawback policy that sufficiently addresses our concerns. Web3. In order to deliver long-term value for shareholders, companies should also consider the interests of their key stakeholders. We will typically support qualified ESPP proposals. We engage an outside advisor to make initial, customized recommendations based on these Proxy Voting Principles and Guidelines. HOW SHARES ARE VOTED We make all of our proxy voting decisions independently based on these Proxy Voting Principles and Guidelines. 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. The compensation committee should carefully consider the specific circumstances of the company and the key individuals the board is focused on incentivizing. In such instances, we typically look for the board to have appropriate independent leadership structures in place. 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. Excluding exigent circumstances, BIS generally considers attendance at less than 75% of the combined board and applicable committee meetings to be poor attendance. 0000004677 00000 n 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. We will consider a variety of possible voting outcomes in contested situations, including the ability to support a mix of management and dissident nominees. 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. Similarly, SASB Standards enable robust implementation of the Integrated Reporting Framework, providing the comparability sought by investors. }mA$ffSDYnbN|d=,AHsNz8L s endstream endobj 2042 0 obj [/ICCBased 2047 0 R] endobj 2043 0 obj <>stream 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. (See chart above.). 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. This structure should be aligned with shareholder interests, particularly the generation of sustainable, long-term value. 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. Dodge & Cox investment leadership & Committee updates. They can be adapted and customized for use by foundations, endowments, asset managers, and retail investors. (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. The research and benchmark policy voting recommendations from both proxy advisors are considered as part of the proxy voting decision . Review details of firms position on all major proxy voting issues. 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. Although we have historically opposed most plans, we may support plans that include a reasonable qualifying offer clause. Such clauses typically require shareholder ratification of the pill and stipulate a sunset provision whereby the pill expires unless it is renewed. 2023 Dodge & Cox. In such cases, we ask that companies highlight the metrics that are industry- or company-specific. Companies should have an established process for identifying, monitoring, and managing business and material risks. 1A public company executive is defined as a Named Executive Officer (NEO) or Executive Chair(go back), 2In addition to the company under review. WebPlease submit your proxy card or voting instruction form as soon as possible. 0000013449 00000 n Companies that engage in political activities should develop and maintain robust processes to guide these activities and mitigate risks, including board oversight. 0000012093 00000 n Boards should disclose how the corporate governance structures adopted upon a companys initial public offering (IPO) are in shareholders best long-term interests. As stewards of our clients investments, BlackRock believes it has a responsibility to engage with management teams and/or board members on material business issues and, for those clients who have given us authority, to vote proxies in the best long-term economic interests of their assets. 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. While we welcome any disclosures and commitments companies choose to make regarding Scope 3 emissions, we recognize that these are provided on a good-faith basis as methodology develops. The information provided here is neither tax nor legal advice. The integrity of financial statements depends on the auditor effectively fulfilling its role. 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. BIS generally supports proposals to seek exclusive forum for certain shareholder litigation. 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. These disclosures should also include the accountability and voting mechanisms that would be available to shareholders. 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 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. The following issue-specific proxy voting guidelines (the Guidelines) summarize BlackRock Investment Stewardships (BIS) philosophy and approach to engagement and voting, as well as our view of governance best practices and the roles and responsibilities of boards and directors for publicly listed U.S. companies. 0000000016 00000 n 0000012363 00000 n When determining whether to support or oppose an advisory vote on a golden parachute plan, BIS may consider several factors, including: It may be difficult to anticipate the results of a plan until after it has been triggered; as a result, BIS may vote against a golden parachute proposal even if the golden parachute plan under review was approved by shareholders when it was implemented. We support incentive plans that foster the sustainable achievement of results both financial and nonfinancial consistent with the companys strategic initiatives. The administration of these MFS Proxy Voting Policies and Procedures is overseen by the MFS Proxy Voting Committee, which Proxy Voting Guidelines: TRPIM. Centralize the data you need to set and surpass your ESG goals., The Big Shift: How Boardrooms Are Evolvingand How Leaders Should Respond. 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. Where boards find that age limits or term limits are the most efficient and objective mechanism for ensuring periodic board refreshment, we generally defer to the boards determination in setting such limits. We ask for disclosures to understand the timeframe and responsibilities of this role. 0000006117 00000 n These roles and responsibilities should be disclosed and easily accessible. Companies should effectively oversee and mitigate material risks related to stakeholders with appropriate due diligence processes and board oversight. In our letter on unequal voting structures, we articulate our view that one vote for one share is the preferred structure for publicly-traded companies. Lastly, we look for shareholder approval of poison pill plans within one year of adoption of implementation. Individual proxy votes therefore will differ from these guidelines from time to time. 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. This makes it possible to elect local 1 Proxy Voting by Investment Advisers, Release No. Goals, and the processes used to set these goals, should be clearly articulated and appropriately rigorous. An offering may be made only by delivery of a confidential offering memorandum to appropriate investors. We generally think that a right to act via written consent is not a sufficient alternative to the right to call a special meeting. 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. Our publicly available commentary provides more information on our approach to executive compensation. BIS may support a request to reprice or exchange underwater options under the following circumstances: BIS may also support a request to exchange underwater options in other circumstances, if we determine that the exchange is in the best interests of shareholders. Environmental, Social, and Governance (ESG) Integration. SASB standards will over time be adapted to ISSB standards but are the reference reporting tool in the meantime. We may support these proposals when they are consistent with our views as described above. WebCanada Proxy Voting Guidelines for TSX-listed Companies; Canada Proxy Voting Guidelines for Venture Companies; Canada Advance Notice Requirements FAQ; 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. I S S G O V E R N A N C E . It is our view that a majority of the directors on the board should be independent to ensure objectivity in the decision-making of the board and its ability to oversee management. In our view, shareholders should be entitled to voting rights in proportion to their economic interests. Proposals to change a corporations form, including those to convert to a public benefit corporation (PBC) structure, should clearly articulate the stakeholder groups the company seeks to benefit and provide detail on how the interests of shareholders would be augmented or adversely affected with the change to a PBC. However, the final voting decision is independent and voting authority rests We typically defer to the board in setting the appropriate size and believe that directors are generally in the best position to assess the optimal board size to ensure effectiveness. We actively engage in ongoing shareholder public debates over proxy-related issues such as 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. Were also watching an evolving pattern with E & S shareholder proposals and expanding engagement opportunities. 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. 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. 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. This process may include internal board evaluations; however, boards may also find it useful to periodically conduct an assessment with a third party. This better macro environment will support better economic growth, financial stability, job growth, productivity, as well as ecosystem stability and health outcomes. By investors carefully consider the specific circumstances of the Sustainability policy, to ensure they can adapted. That include a reasonable qualifying offer clause its clients or other delegated authority collaborating on agendas, documents, minutes... Instances, we may support these proposals when they are consistent with views. Circumstances of the company and the processes used to set these goals, should be clearly and. Consistent with the companys strategic initiatives committees should guard against contractual arrangements that entitle. Approval of poison pill plans within one year of adoption of implementation via written consent not! 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