Glass Lewis released its Proxy Paper Policy Guidelines for 2022 and updated approach to ESG proposals.
Noteworthy changes to the Guidelines include but are not limited to:
Board gender and other diversity
- Beginning in 2022, for Russell 3000 companies, Glass Lewis will generally recommend a vote against the nominating committee chair of boards with fewer than two gender diverse directors or the entire nominating committee of boards with no gender diverse directors. Its existing policy of a minimum of one gender diverse director will remain in place for non-Russell 3000 companies and for boards with six or fewer directors.
- Beginning with shareholder meetings after January 1, 2023, Glass Lewis will generally recommend voting against the nominating committee chair of Russell 3000 boards that are less than 30% gender diverse, reflecting a policy change from a fixed number of directors to a percentage of the board in evaluating diverse representation.
- Adequate proxy disclosure may ward off a negative voting recommendation for boards that don't meet the minimum requirements.
- Glass Lewis will generally recommend a vote against the nominating committee chair at companies that fail to comply with mandatory board composition and/or disclosure requirements (concerning gender and otherwise) set forth in applicable state laws and listing standards (e.g., Nasdaq board diversity disclosure rule) when they come into effect.
Director diversity & skills disclosure
Beginning in 2022, Glass Lewis may recommend voting against S&P 500 nominating and/or governance committee chairs for failing to provide disclosure in each of these categories:
- Board’s current percentage of racial/ethnic diversity
- Whether the board’s definition of diversity explicitly includes gender and/or race/ethnicity
- Whether the board has adopted a policy requiring women and minorities to be included in the initial pool of candidates when selecting new director nominees (aka “Rooney Rule”)
- Board skills disclosure
Beginning in 2023, Glass Lewis will generally recommend voting against nominating and/or governance committee chairs of S&P 500 companies that don’t disclose individual or aggregate racial/ethnic minority board demographic information.
Environmental and social risk oversight
Beginning in 2022, Glass Lewis will note as a concern when Russell 1000 companies don’t provide clear disclosure concerning board oversight of E&S issues. For shareholder meetings after January 1, 2022, Glass Lewis will generally recommend voting against S&P 500 governance committee chairs of companies that don’t explicitly disclose the board’s E&S oversight role.
Waiver of Age and Tenure Policies
Beginning in 2022, barring a compelling rationale such as consummation of a corporate transaction, Glass Lewis will generally recommend a vote against the nominating and/or governance committee chair where the board has waived its term/age limits for two or more consecutive years.
See the Summary of Changes on page 7 for additional policy changes and clarifications.
The areas of change highlighted in the ESG Initiatives Policy Guidelines (ESG proposals) summary on page 7 include E&S risk oversight, say on climate, and written consent.
See Glass Lewis's release and additional information & resources on our Proxy Advisors page.