In this new post: “The Implementation, and Implications, of Universal Proxy Cards,” Glass Lewis (unsurprisingly) expressed its support for the universal proxy’s facilitation of a more “democratic” process for shareholders and enthusiasm about its role in the process. Its “overall approach to evaluating proxy contests” (see here) reportedly will remain unchanged.
All that being said, in order to support any dissident nominee in a proxy contest, we still require the activist to make a compelling case for change and to nominate qualified, unconflicted director candidates who seem better suited to address deficiencies or to facilitate a superior outcome for shareholders. In short, the hurdles we believe an activist must clear in order to win board representation will not be lower under a universal proxy card system.
As with ISS, which we reported on last week, Glass Lewis expects a greater focus on the skills and qualifications of individual director nominees (both on a standalone basis and in the context of the board as a whole), and notes companies’ ongoing responsibilities to compose and refresh their boards.
We will discuss this development and much more on our upcoming webinar: Universal Proxy Rules: What to Do Now on September 29 from 1 – 2 pm ET. Register now!
See “Understanding the impact of the SEC’s amended proxy rules” (IR Magazine) and additional resources on our Universal Proxy page.
This post first appeared in the weekly Society Alert!