Proxy advisory firms Institutional Shareholder Services Inc. (ISS) and Glass Lewis recently released updates to their respective proxy voting policies and guidelines. The ISS changes generally will apply to shareholder meetings held on or after February 1, 2020; and the Glass Lewis changes generally will apply to shareholder meetings on or after January 1, 2020. We describe the key changes below.
Key Points. Of particular note:
- Board gender diversity. ISS will now generally recommend voting against or withholding votes from the chair of the nominating committee (or other directors on a case-by-case basis) at companies with no women on the board.
- Multi-class structures. ISS will now generally recommend voting against or withholding votes from the entire board if prior to or in connection with a public offering the company has implemented a multi-class structure with unequal voting rights without a sunset provision that ISS considers reasonable.
- Shareholder proposals. Glass Lewis’s update reflects the firm’s continuing efforts to promote shareholder opportunities to vote on shareholder proposals relating to material matters (particularly relating to “responsible and financially sustainable business practices”) even when the shareholder proposal is properly excludable under Rule 14a-8 of the Exchange Act. In response to the SEC’s recent announcement that it may decline to take a view or may respond orally to no-action requests for shareholder proposals under Rule 14a-8, Glass Lewis now will generally recommend voting against members of the governance committee if the company omits a shareholder proposal from its proxy statement without having received written no-action relief from the SEC.
