Where several measures are grouped into one proposal, BIS may reject certain positive changes when linked with proposals that generally contradict or impede the rights and economic interests of shareholders. Review details of firms position on all major proxy voting issues. We generally support proposals to increase or issue preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and where the terms of the preferred stock appear reasonable. We generally support such proposals unless the agenda contains items that we judge to be detrimental to shareholders best long-term economic interests. In addition, companies that have implemented dual or multiple class share structures should review these structures on a regular basis, or as company circumstances change. We see it as a means to promoting diversity of thought and avoiding group think in the boards exercise of its responsibilities to advise and oversee management. (go back), 19BlackRock is subject to certain regulations and laws in the United States that place restrictions and limitations on how BlackRock can interact with the companies in which we invest on behalf of our clients, including our ability to submit shareholder proposals or elect directors to the board. Before investing in any Dodge & Cox Fund, you should carefully consider the Fund's investment objectives, risks, and charges and expenses. We generally view golden parachutes as encouragement to management to consider transactions that might be beneficial to shareholders. Where a company is listed on multiple exchanges or incorporated in a country different from their primary listing, we will seek to apply the most relevant market guideline(s) to our analysis of the companys governance structure and specific proposals on the shareholder meeting agenda. 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). By end January 2023: Publication of updated Frequently Asked Questions (FAQ) documents on ISS (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. Prospective investors should consult with a tax or legal advisor before making any investment decision. BIS will generally not support these proposals. 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. 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. WebProxy Voting Guidelines February 2022 3 Introduction Proxy voting policy As an asset manager, RBC Global Asset Management (RBC GAM) has an obligation to act in the Web the criteria for the active exercise of voting rights are clearly regulated; conflicts of interest are identified and addressed. 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. We ask for disclosures to understand the timeframe and responsibilities of this role. The views and strategies described may not be suitable for all investors. A growing number of companies, financial institutions, as well as governments, have committed to advancing decarbonization in line with the Paris Agreement. 0000024740 00000 n 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. There is growing consensus that companies can benefit from the more favorable macroeconomic environment under an orderly, timely, and equitable global energy transition. We also recognize the potential benefits of dual class shares to newly public companies as they establish themselves; however, these structures should have a specific and limited duration. 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. Past performance is no guarantee of future results. 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 These roles and responsibilities should be disclosed and easily accessible. However, in these instances, boards should periodically review the rationale for a classified structure and consider when annual elections might be more appropriate. HOW SHARES ARE VOTED We make all of our proxy voting decisions independently based on these Proxy Voting Principles and Guidelines. 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. Performance-based compensation should include metrics that are relevant to the business and stated strategy and/or risk mitigation efforts. Our publicly available commentary provides more information on our approach to executive compensation. 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. We will normally support proposals seeking to introduce bylaws requiring a majority vote standard for director elections. proper books and records relating to proxy voting are kept. Board Management for Education and Government, Internal Controls Over Financial Reporting (SOX), statement in 2018 by Keith Johnson and Cynthia Williams. From time to time, shareholder proposals may be presented to promote auditor independence or the rotation of audit firms. [16] Yet, the path ahead is deeply uncertain and uneven, with different parts of the economy moving at different speeds. 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. Key updates for the 2020 proxy season include: Problematic Governance Structure Newly Public Companies. 'Td9m by]Z`!,RsLfX f i,^ptO+P7,CO }mT/>E9( In order to deliver long-term value for shareholders, companies should also consider the interests of their key stakeholders. 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. 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. We will typically support qualified ESPP proposals. Examples of environmental issues include, but are not limited to, water use, land use, waste management, and climate risk. A companys approach to human capital management (HCM) is a critical factor in fostering an inclusive, diverse, and engaged workforce, which contributes to business continuity, innovation, and long-term value creation. 0000012287 00000 n 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. 0000000016 00000 n These guidelines are divided into eight key themes, which group together the issues that frequently appear on the agenda of shareholder Boards should disclose how the corporate governance structures adopted upon a companys initial public offering (IPO) are in shareholders best long-term interests. Where discretion has been used by the compensation committee, we look for disclosures relating to how and why the discretion was used and how the adjusted outcome is aligned with the interests of shareholders. Please read the prospectus and summary prospectus carefully before investing. 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. 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. 0000012093 00000 n These guidelines are also intended to inform all investors on how to vote in an ESG-aligned way. In the absence of robust disclosures, we may reasonably conclude that companies are not adequately managing risk. We are particularly interested in understanding how risk oversight processes evolve in response to changes in corporate strategy and/or shifts in the business and related risk environment. These guidelines should be read in conjunction with the BlackRock Investment Stewardship Global Principles. 0000008767 00000 n 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. WebProxy voting is a key element in our approach to sustainable investing. 0000005611 00000 n 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. Centralize the data you need to set and surpass your ESG goals., The Big Shift: How Boardrooms Are Evolvingand How Leaders Should Respond. 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. 0000042408 00000 n 0000013331 00000 n We note there may be cases in which the final vote recommendation at a particular company Continue to $country-name$ Individual Investor site. 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. 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. 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. In addition, all members of audit, compensation, and nominating/governance committees should be independent. Dodge & Cox Funds are distributed by Foreside Fund Services, LLC, which is not affiliated with Dodge & Cox. 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). We generally do not favor programs focused on awards that require performance levels to be met and maintained for a relatively short time period for payouts to be earned, unless there are extended vesting and/or holding requirements. We look to public disclosures for insight into the scope of the audit committee responsibilities, including an over view of audit committee processes, issues on the audit committee agenda, and key decisions taken by the audit committee. 0000006117 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. Where a standardized proxy access provision exists, we will generally oppose shareholder proposals requesting outlier thresholds. 2023 Dodge & Cox. trailer <<745C615CB068466D8BA2B6F1B596C766>]/Prev 714575/XRefStm 2073>> startxref 0 %%EOF 2076 0 obj <>stream The Assam Rifles - Friends of the Hill People? 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. Proxy Voting Guidelines The guidelines are based on generally accepted standards and best practices for corporate gov- We may consider comparable transaction analyses provided by the parties financial advisors and our own valuation assessments. 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. Equal Employment Opportunity Commissions EEO-1 Survey. We encourage companies to disclose how their capital allocation to various energy sources is consistent with their strategy. Scope The guiding principle of this Policy is that voting rights should be exercised and 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. It is our view that well-run companies will effectively evaluate and manage material sustainability-related risks and opportunities relevant to their businesses. This makes it possible to elect local The integrity of financial statements depends on the auditor effectively fulfilling its role. 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. 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. Compensation committees should guard against contractual arrangements that would entitle executives to material compensation for early termination of their contract. 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. BpUgwfZjYhX~,wEY ZQV+U%q?K$v ? 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. There may be legitimate instances where underwater options create an overhang on a companys capital structure and a repricing or option exchange may be warranted. To that end, we favor an independent auditor. WebName of proxy vote by the homeowners association during the _____ meeting. We recognize that some companies may report using different standards, which may be required by regulation, or one of a number of private standards. Companies should effectively oversee and mitigate material risks related to stakeholders with appropriate due diligence processes and board oversight. Web3. 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. 1A public company executive is defined as a Named Executive Officer (NEO) or Executive Chair(go back), 2In addition to the company under review. Webguidelines are based on a commitment to create and preserve economic value and to advance principles of good corporate governance. 0000063266 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. We acknowledge that these factors may also play into the various elements of diversity that a board may attract. We also generally oppose plans that allow for repricing without shareholder approval. WebGlass Lewis 2023 Proxy Voting Policy Guidelines are now available for the United States and Canada, Continental Europe, the UK, and ESG. Proxy Voting Guidelines: TRPA. 1 Proxy Voting by Investment Advisers, Release No. In our view, shareholders should be entitled to voting rights in proportion to their economic interests. WebEXECUTIVE SUMMARY Policy Updates for 2023 W W W . The board should exercise appropriate oversight of management and the business activities of the company. You'll be re-directed to Individual Investor site. We generally favor prompt recoupment from any senior executive whose compensation was based on faulty financial reporting or deceptive business practices. We look for disclosures from companies to help us understand their approach and do not prescribe any particular board composition. Boards should clearly explain the economic and strategic rationale for any proposed transactions or material changes to the business. 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. We encourage companies to provide transparency around risk management, mitigation, and reporting to the board. 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. ? q+Hv~ IicC"%l|lc?gN.yV^}v]wmY]Mtuw?aY:M}Q]1_/)f_Xe[iRVyxrI^r.%"W`O`!q Where the company already has a sufficiently robust majority voting process in place, we may not support a shareholder proposal seeking an alternative mechanism. (See chart above.). Our evaluation of equity compensation plans is based on a companys executive pay and performance relative to peers and whether the plan plays a significant role in a pay-for-performance disconnect. 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. 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. The management of nature-related factors is increasingly a core component of some companies ability to generate sustainable, long-term financial returns for shareholders, particularly where a companys strategy is heavily reliant on the availably of natural capital, or whose supply chains are exposed to locations with nature-related risks.
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