These 20 big-name public company, pension fund and investment firm CEOs signed onto these newly-released (today) updated Commonsense Principles (of Corporate Governance) 2.0, which tout these additions and enhancements from the initial Principles released in 2016:
- Board members should be prepared to serve for a minimum of three years. [Section I(c)]
- If board elections are not annual, companies should explain why. [Section I(c)]
- Companies and shareholders are encouraged to engage early on important proxy proposals. [Section II(b)]
- Companies should allow some form of proxy access. [Section III(a)]
- Poison pills and other anti-takeover defenses should be put to a shareholder vote and re-evaluated by the board on a periodic basis. [Section III(d)]
- Asset managers should disclose if they rely on proxy advisors to inform their decision making. [Section VIII(a)]
- Asset managers should disclose their conflict of interest policies in their proxy voting and shareholder engagement activities. [Section VIII(a)]
- Portfolio managers should be compensated based on performance over an appropriate term, given the strategy and investment time horizon for the portfolio. [Section VIII(a)]
- Asset owners should promote sound, long-term oriented governance in their direct interactions with both companies and asset managers. [Section VIII(b)]
- Asset owners should use benchmarks and performance reports consistent with their investment time horizon to affect governance outcomes with asset managers and evaluate the asset managers’ performance on both investment returns and governance. [Section VIII(b)]
These nine of the 20 signatories are new: DowDuPont, Johnson & Johnson, Bank of America, Coca-Cola, IBM, BNY Mellon, AT&T, Procter & Gamble, and the Washington State Investment Board.
See our initial report on the 1.0 version in 2016 and related resources. Watch for more analysis & commentary in next week's Society Alert!