Proxy access, a provision that companies fought against for decades, has now been adopted by more than a third of Standard & Poor’s (S&P) 500 companies within a two-year span, driven largely by the submission of shareholder proposals calling for the reform. Around 60% of almost 200 companies that received proxy access shareholder proposals for 2016 annual meetings adopted proxy access bylaws before the proposal even went to a vote.
More than 240 companies with proxy access bylaws by index
What this means for boards
Pressure on companies to adopt proxy access is likely to increase. Actions to consider:
- Proactively raise the topic with key shareholders to better understand their views on proxy access, including around preferred terms (e.g., shareholders’ ability to work as a group and the number of board seats that may be filled)
- Confirm that communications around board composition make clear how the skill sets of individual directors are aligned with the company’s strategy and risk oversight efforts, and discuss the board’s assessment, refreshment and nomination processes