This makes it possible to elect local We generally support stock splits that are not likely to negatively affect the ability to trade shares or the economic value of a share. It is in this context that we are interested in diversity in the boardroom. [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. 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. Key updates for the 2020 proxy season include: Problematic Governance Structure Newly Public Companies. We use third party research, in addition to our own analysis, to evaluate existing and proposed compensation structures. Our publicly available commentary provides more information on our approach to climate risk and the global energy transition. (go back), 9Special situations are broadly defined as events that are non-routine and differ from the normal course of business for a companys shareholder meeting, involving a solicitation other than by management with respect to the exercise of voting rights in a manner inconsistent with managements recommendation. When presented with shareholder proposals requesting increased disclosure on corporate political activities, BIS will evaluate publicly available information to consider how a companys lobbying and political activities may impact the company. 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. 0000005166 00000 n 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. During a CEO transition, companies may elect for the departing CEO to maintain a role in the boardroom. 0000012069 00000 n 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. Where a standardized proxy access provision exists, we will generally oppose shareholder proposals requesting outlier thresholds. Payouts to executives should reflect both the executives contributions to the companys ongoing success, as well as exogenous factors that impacted shareholder value. Compensation for directors should generally be structured to attract and retain directors, while also aligning their interests with those of shareholders. Shareholders should have the right to vote on key corporate governance matters, including changes to governance mechanisms and amendments to the charter/articles/bylaws. 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. Academic and other research reveals correlations between specific dimensions of diversity and effects on decision-making processes and outcomes. 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). Boards should disclose how the corporate governance structures adopted upon a companys initial public offering (IPO) are in shareholders best long-term interests. 0000012767 00000 n 0000013250 00000 n We generally favor a simple majority voting requirement to pass proposals. Such information shall be provided to a Proxy Administrator each time Artisan Partners enters into an Streamline your next board meeting by collating and collaborating on agendas, documents, and minutes securely in one place. 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 may support shareholder proposals requesting that implementation of such arrangements require shareholder approval. 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. It is our view that shareholders should have the opportunity to express feedback on annual incentive programs and changes to long-term compensation before multiple cycles are issued. In such instances, we typically look for the board to have appropriate independent leadership structures in place. Voting guidelines. Among these smaller companies, we look for the presence of diversity and take into consideration the progress that companies are making. Where the company already has a sufficiently robust majority voting process in place, we may not support a shareholder proposal seeking an alternative mechanism. BIS recognizes that climate change can be challenging for many companies, as they seek to drive long-term value by mitigating risks and capturing opportunities. (go back), 8Including, but not limited to, individuals who identify as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, or Native Hawaiian or Pacific Islander; individuals who identify as LGBTQ+; individuals who identify as underrepresented based on national, Indigenous, religious, or cultural identity; individuals with disabilities; and veterans. 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. Companies that engage in political activities should develop and maintain robust processes to guide these activities and mitigate risks, including board oversight. 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. Continue to $country-name$ Individual Investor site. 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. I S S G O V E R N A N C E . 0000042526 00000 n &/%C`6c l`T8N! In his frustration, he lit his bottle on fire and threw it away, causing the fire to break out. WebThe 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. By end January 2023: Publication of updated Frequently Asked Questions (FAQ) documents on ISS [4] However, BIS may vote against the most senior non-executive member of the board when appropriate independence is lacking in designated leadership roles. (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. Relevant shareholder proposals are assessed on a case-by-case basis. Our view of independence may vary from listing standards. These guidelines are also intended to inform all investors on how to vote in an ESG-aligned way. Compensation structures should generally drive outcomes that align the pay of the executives with performance of the company and the value received by shareholders. We encourage the company to explain their executive succession planning process, including where accountability lies within the boardroom for this task, without prematurely divulging sensitive information commonly associated with this exercise. We also recognize that continued investment in traditional energy sources, including oil and gas, is required to maintain an orderly and equitable transitionand that divestiture of carbon-intensive assets is unlikely to contribute to global emissions reductions. WebCanada Proxy Voting Guidelines for TSX-listed Companies; Canada Proxy Voting Guidelines for Venture Companies; Canada Advance Notice Requirements FAQ; Self identified board demographic diversity can usefully be disclosed in aggregate, consistent with local law. WebInvesting involves risk, including possible loss of principal. 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. Consequently, we ask companies to demonstrate a robust approach to HCM and provide shareholders with disclosures to understand how their approach aligns with their stated strategy and business model. 0000024740 00000 n We acknowledge that the use of peer group evaluation by compensation committees can help calibrate competitive pay; however, we are concerned when the rationale for increases in total compensation is solely based on peer benchmarking. 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. 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 We will evaluate these instances on a case-by-case basis. 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. Clear and consistent disclosures on these matters are critical for investors to make an informed assessment of a companys HCM practices. jxD NyA%oIL.Mr`sjk BCy +MX |. |_j l3 endstream endobj 2075 0 obj <>/Filter/FlateDecode/Index[347 1689]/Length 63/Size 2036/Type/XRef/W[1 2 1]>>stream 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. 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. H\n0E BIS will generally support annual advisory votes on executive compensation. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Posted by Sandy Boss, John Roe and Jessica McDougall, BlackRock, Inc, on, Harvard Law School Forum on Corporate Governance, Do Diverse Directors Influence DEI Outcomes, International Financial Reporting Standards (IFRS) Foundation, International Sustainability Standards Board (ISSB), https://www.blackrock.com/corporate/literature/whitepaper/bii-managing-the-net-zero-transition-february-2022.pdf, Mergers, acquisitions, asset sales, and other special transactions, Material sustainability-related risks and opportunities, Employment as a senior executive by the company or a subsidiary within the past five years, An equity ownership in the company in excess of 20%, Having any other interest, business, or relationship (professional or personal) which could, or could reasonably be perceived to, materially interfere with the directors ability to act in the best interests of the company and its shareholders, Where the board has failed to facilitate quality, independent auditing or accounting practices, we may vote against members of the audit committee, Where the company has failed to provide shareholders with adequate disclosure to conclude that appropriate strategic consideration is given to material risk factors (including, where relevant, sustainability factors), we may vote against members of the responsible committee, or the most relevant director, Where it appears that a director has acted (at the company or at other companies) in a manner that compromises their ability to represent the best long-term economic interests of shareholders, we may vote against that individual, Where a director has a multi-year pattern of poor attendance at combined board and applicable committee meetings, or a director has poor attendance in a single year with no disclosed rationale, we may vote against that individual. 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