Georgeson observed that T. Rowe Price switched this year from Glass Lewis to ISS for its proxy advisory and voting services. ISS's voting recommendations and vote executions on T. Rowe's behalf are purportedly based on the investor's custom voting guidelines, subject to its portfolio managers' ultimate decision-making. As such, the change in advisors isn't projected to have much of an impact except perhaps on proposals that are subject to a case-by-case analysis, such as say-on-pay.
The report also notes that T. Rowe's updated proxy voting guidelines added the topic of board diversity; however, the investor has not (yet) adopted a voting policy on this topic:
ISSUE: BOARD DIVERSITY T. ROWE PRICE GUIDELINE:
Board diversity is an important issue for a growing number of investors, including T. Rowe Price. At a high level, the composition of the average company board does not reflect the diversity of the stakeholders these companies represent — their employees, customers, suppliers, communities, or investors. A substantial body of academic evidence supports our own observation as investors: that boards lacking in diversity represent a sub-optimal composition and a potential risk to the company's competiveness over time..
We recognize diversity can be defined across a number of dimensions. However, if a board is to be considered meaningfully diverse, in our view some diversity across gender, ethnic or nationality lines must be present. At this time, we have not changed our voting guidelines for director elections for companies without any outward evidence of board diversity. However, these situations are a focus of our engagement program, and may in the future form the basis of new voting guidelines.
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Access institutional investor voting guidelines & policies here. This post first appeared in the weekly Society Alert!
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