0000012069 00000 n 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. 0000004042 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. Disclosure of material issues that affect the companys long-term strategy and value creation, including, when relevant, material sustainability-related factors, is essential for shareholders to appropriately understand and assess how effectively the board is identifying, managing, and mitigating risks. The information on this website does not constitute an offer to sell, or a solicitation of an offer to purchase, securities in any jurisdiction to any person to whom it is not lawful to make such an offer. 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. Where companies are unwilling to voluntarily implement one share, one vote within a specified timeframe, or are unresponsive to shareholder feedback for change over time, we generally support shareholder proposals to recapitalize stock into a single voting class. It is our view that well-run companies will effectively evaluate and manage material sustainability-related risks and opportunities relevant to their businesses. In cases where a board unilaterally adopts exclusive forum provisions that we consider unfavorable to the interests of shareholders, we will vote against the Independent Chair or Lead Independent director and members of the nominating/governance committee. 0000013107 00000 n Shareholders should have the opportunity to review substantial governance changes individually without having to accept bundled proposals. WebThis Renaissance Technologies website (www.renfund.com) is by invitation only. 3 - vested Artisan Partners with proxy voting authority or has reserved or delegated that responsibility to another designated person; and - adopted a proxy voting policy that Artisan Partners is required to follow. Among these smaller companies, we look for the presence of diversity and take into consideration the progress that companies are making. Voting Process The Proxy Committee has approved proxy voting guidelines applicable to specific types of common proxy proposals (the Approved Guidelines). We generally favor prompt recoupment from any senior executive whose compensation was based on faulty financial reporting or deceptive business practices. 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. We typically support shareholder proposals on these matters unless the company already has a robust clawback policy that sufficiently addresses our concerns. 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. 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. Further, if a company qualifies as an emerging growth company (an EGC) under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), we will give consideration to the NYSE and NASDAQ governance exemptions granted under the JOBS Act for the duration such a company is categorized as an EGC. [15] It is, of course, up to each company to define their own strategy: that is not the role of BlackRock or other investors. We will generally engage new companies on topics such as classified boards and supermajority vote provisions to amend bylaws, as we think that such arrangements may not be in the best interests of shareholders over the long-term. We may decide to support a shareholder proposal requesting additional disclosures if we identify a material inconsistency or feel that further transparency may clarify how the companys political activities support its long-term strategy. A companys board of directors should put in place a compensation structure that balances incentivizing, rewarding, and retaining executives appropriately across a wide range of business outcomes. 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. Where a company has failed to appropriately provide robust disclosures and evidence of effective business practices, BIS may express concerns through our engagement and voting. 0000015446 00000 n 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. In an important change for newly public companies We look for disclosures from companies to help us understand their approach and do not prescribe any particular board composition. In the U.S., we believe that boards should aspire to at least 30% diversity of membership, [7] and we encourage large companies, such as those in the S&P 500, to lead in achieving this standard. While we believe special awards[11] should be used sparingly, we acknowledge that there may be instances when such awards are appropriate. 0000042449 00000 n Excluding exigent circumstances, BIS generally considers attendance at less than 75% of the combined board and applicable committee meetings to be poor attendance. In our view, shareholders should be entitled to voting rights in proportion to their economic interests. In the absence of a significant governance concern, we defer to boards to designate the most appropriate leadership structure to ensure adequate balance and independence. 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. Environmental, Social, and Governance (ESG) Integration. 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. If you have received an invitation, you must first create a login by following the link provided in the email sent to you. Specifically, we look for companies to disclose strategies that they have in place that mitigate and are resilient to any material risks to their long-term business model associated with a range of climate-related scenarios, including a scenario in which global warming is limited to well below 2C, and considering global ambitions to achieve a limit of 1.5C. 0000006117 00000 n We generally favor a simple majority voting requirement to pass proposals. We will consider whether the transaction involves a dissenting board or does not appear to be the result of an arms-length bidding process. proper books and records relating to proxy voting are kept. Our publicly available commentary provides more information on our approach. Streamline your next board meeting by collating and collaborating on agendas, documents, and minutes securely in one place. This makes it possible to elect local Continue to $country-name$ Individual Investor site. 0000013331 00000 n From time to time, shareholder proposals may be presented to promote auditor independence or the rotation of audit firms. We also favor prompt recoupment from any senior executive whose behavior caused material financial harm to shareholders, material reputational risk to the company, or resulted in a criminal proceeding, even if such actions did not ultimately result in a material restatement of past results. 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. A classified board structure may also be justified at non-operating companies, e.g., closed-end funds or business development companies (BDC),[3] in certain circumstances. The research and benchmark policy voting recommendations from both proxy advisors are considered as part of the proxy voting decision . 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. (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. Business model, strategy, location, and company size may also impact our analysis of board diversity. Increasingly, we see leading boards adding members whose experience deepens the boards understanding of the companys customers, employees, and communities. [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. When assessing how to vote including on the election of directors and relevant shareholder proposals robust disclosures are essential for investors to understand, where appropriate, how companies are integrating material sustainability risks and opportunities across their business and strategic, long-term planning. Where a director serves on an excessive number of boards, which may limit their capacity to focus on each boards needs, we may vote against that individual. 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). Web the criteria for the active exercise of voting rights are clearly regulated; conflicts of interest are identified and addressed. 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. Foreign investing, especially in developing countries, has special risks such as currency and market volatility and political and social instability. Proxy Voting Policy . 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. In doing so, we typically consider the governance standards of the companys primary listing, the market standards by which the company governs themselves, and the market context of each specific proposal on the agenda. 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. 0000002522 00000 n We recognize that some companies may report using different standards, which may be required by regulation, or one of a number of private standards. We actively engage in ongoing shareholder public debates over proxy-related issues such as 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. 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. Key updates for the 2020 proxy season include: Problematic Governance Structure Newly Public Companies. (go back), Your email is never published nor shared. , has special risks such as currency and market volatility and political and instability. Back ), your email is never published nor shared webthis Renaissance Technologies website ( www.renfund.com ) is by only! Are clearly regulated ; conflicts of interest are identified and addressed guidelines ) in. 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