Our publicly available commentary provides more information on our approach. Increasingly, we see leading boards adding members whose experience deepens the boards understanding of the companys customers, employees, and communities. For this reason, BIS sees engagement with and the election of directors as one of our most critical responsibilities. Common impediments to independence may include: We may vote against directors who we do not consider to be independent, including at controlled companies, when we believe oversight could be enhanced with greater independent director representation. RBC GAM subscribes to the research of both ISS and Glass, Lewis & Co . In cases where there is a Say on Pay vote, BIS will respond to the proposal as informed by our evaluation of compensation practices at that particular company and in a manner that appropriately addresses the specific question posed to shareholders. All Rights Reserved. In our view, shareholders should be entitled to voting rights in proportion to their economic interests. Clear and consistent disclosures on these matters are critical for investors to make an informed assessment of a companys HCM practices. Our publicly available commentary provides more information on our approach to HCM. (go back), 19BlackRock is subject to certain regulations and laws in the United States that place restrictions and limitations on how BlackRock can interact with the companies in which we invest on behalf of our clients, including our ability to submit shareholder proposals or elect directors to the board. Dodge & Cox investment leadership & Committee updates. We will evaluate these disclosures to inform our view of how a company is managing material nature-related risks and opportunities, as well as in our assessment of relevant shareholder proposals. We may consider comparable transaction analyses provided by the parties financial advisors and our own valuation assessments. To signal our concerns, we may also vote against the chair of the nominating/governance committee, or where no chair exists, the nominating/governance committee member with the longest tenure. H\n0E We may oppose shareholder proposals requesting the right to act by written consent in cases where the proposal is structured for the benefit of a dominant shareholder to the exclusion of others, or if the proposal is written to discourage the board from incorporating appropriate mechanisms to avoid the waste of corporate resources when establishing a right to act by written consent. jxD NyA%oIL.Mr`sjk BCy +MX |. |_j l3 endstream endobj 2075 0 obj <>/Filter/FlateDecode/Index[347 1689]/Length 63/Size 2036/Type/XRef/W[1 2 1]>>stream Consequently, we ask companies to demonstrate a robust approach to HCM and provide shareholders with disclosures to understand how their approach aligns with their stated strategy and business model. Where we conclude that a company has failed to align pay with performance, we will vote against the management compensation proposal and relevant compensation committee members. Appropriate risk oversight of business-relevant and material sustainability-related considerations is a component of a sound governance framework. However, we may oppose this right in cases where the proposal is structured for the benefit of a dominant shareholder, or where a lower threshold may lead to an ineffective use of corporate resources. proper books and records relating to proxy voting are kept. To that end, we favor an independent auditor. Succession planning should cover scenarios over both the long-term, consistent with the strategic direction of the company and identified leadership needs over time, as well as the short-term, in the event of an unanticipated executive departure. window.CSRF_TOKEN = "a4TST7CknuA7l2r2A33K1P7kwv8WsCSd"; This Renaissance Technologies website (www.renfund.com) is by invitation only. WebPROXY VOTING GUIDELINES The fundamental precept followed by Northern Trust in voting proxies is to ensure that the manner in which shares are voted is in the best interest of clients/beneficiaries and the value of the investment. We may also consider whether executive and/or board members financial interests appear likely to affect their ability to place shareholders interests before their own, as well as measures taken to address conflicts of interest, We prefer transaction proposals that include the fairness opinion of a reputable financial advisor assessing the value of the transaction to shareholders in comparison to recent similar transactions, Whether we determine that the triggering event is in the best interests of shareholders, Whether management attempted to maximize shareholder value in the triggering event, The percentage of total premium or transaction value that will be transferred to the management team, rather than shareholders, as a result of the golden parachute payment, Whether excessively large excise tax gross-up payments are part of the pay-out, Whether the pay package that serves as the basis for calculating the golden parachute payment was reasonable in light of performance and peers, Whether the golden parachute payment will have the effect of rewarding a management team that has failed to effectively manage the company, The company has experienced significant stock price decline as a result of macroeconomic trends, not individual company performance, Directors and executive officers are excluded; the exchange is value neutral or value creative to shareholders; tax, accounting, and other technical considerations have been fully contemplated, There is clear evidence that absent repricing, employee incentives, retention, and/or recruiting may be impacted, Disclose the identification, assessment, management, and oversight of material sustainability related risks and opportunities in accordance with the four pillars of TCFD, Publish material, investor-relevant, industry-specific metrics and rigorous targets, aligned with SASB (ISSB) or comparable sustainability reporting standards. Our evaluation of equity compensation plans is based on a companys executive pay and performance relative to peers and whether the plan plays a significant role in a pay-for-performance disconnect. These may include instances where shareholders nominate director candidates, oppose the view of management and/or the board on mergers, acquisitions, or other transactions, etc. There should be a clear link between variable pay and company performance that drives sustained value creation for our clients as shareholders. As stewards of our clients investments, BlackRock believes it has a responsibility to engage with management teams and/or board members on material business issues and, for those clients who have given us authority, to vote proxies in the best long-term economic interests of their assets. We generally do not support shareholder proposals seeking the reimbursement of proxy contest expenses, even in situations where we support the shareholder campaign. Where compensation structures provide for a front-loaded[10] award, we look for appropriate structures (including vesting and/or holding periods) that motivate sustained performance for shareholders over a number of years. Join Lisa Edwards, Diligent President and COO, and Fortune Media CEO Alan Murray to discuss how corporations' role in the world has shifted - and how leaders can balance the risks and opportunities of this new paradigm. 0000006117 00000 n Companies may engage in certain political activities, within legal and regulatory limits, in order to support public policy matters material to the companies long-term strategies. When presented with shareholder proposals requesting increased disclosure on corporate political activities, BIS will evaluate publicly available information to consider how a companys lobbying and political activities may impact the company. The GPVSC endeavours to hold meetings to decide how to vote particular proxies sufficiently before the voting deadline so that the procedures below regarding conflicts can be completed before the GPVSCs voting determination. Finally, pension contributions and other deferred compensation arrangements should be reasonable in light of market practices. We also favor prompt recoupment from any senior executive whose behavior caused material financial harm to shareholders, material reputational risk to the company, or resulted in a criminal proceeding, even if such actions did not ultimately result in a material restatement of past results. Sandy Boss is Global Head of Investment Stewardship, John Roe is Head of Investment Stewardship (BIS) in the Americas, and Jessica McDougall is a Director at BlackRock Inc. 0000002485 00000 n 2036 0 obj <> endobj xref We also generally oppose plans that allow for repricing without shareholder approval. 0000006004 00000 n Prospective investors should consult with a tax or legal advisor before making any investment decision. Where discretion has been used by the compensation committee, we look for disclosures relating to how and why the discretion was used and how the adjusted outcome is aligned with the interests of shareholders. 1 Proxy Voting by Investment Advisers, Release No. 0000015236 00000 n 0000002290 00000 n The research and benchmark policy voting recommendations from both proxy advisors are considered as part of the proxy voting decision . Investing involves risk, including possible loss of principal. There are two commonly accepted structures for independent leadership to balance the CEO role in the boardroom: 1) an independent Chair; or 2) a Lead Independent director when the roles of Chair and CEO are combined, or when the Chair is otherwise not independent. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Posted by Sandy Boss, John Roe and Jessica McDougall, BlackRock, Inc, on, Harvard Law School Forum on Corporate Governance, Do Diverse Directors Influence DEI Outcomes, International Financial Reporting Standards (IFRS) Foundation, International Sustainability Standards Board (ISSB), https://www.blackrock.com/corporate/literature/whitepaper/bii-managing-the-net-zero-transition-february-2022.pdf, Mergers, acquisitions, asset sales, and other special transactions, Material sustainability-related risks and opportunities, Employment as a senior executive by the company or a subsidiary within the past five years, An equity ownership in the company in excess of 20%, Having any other interest, business, or relationship (professional or personal) which could, or could reasonably be perceived to, materially interfere with the directors ability to act in the best interests of the company and its shareholders, Where the board has failed to facilitate quality, independent auditing or accounting practices, we may vote against members of the audit committee, Where the company has failed to provide shareholders with adequate disclosure to conclude that appropriate strategic consideration is given to material risk factors (including, where relevant, sustainability factors), we may vote against members of the responsible committee, or the most relevant director, Where it appears that a director has acted (at the company or at other companies) in a manner that compromises their ability to represent the best long-term economic interests of shareholders, we may vote against that individual, Where a director has a multi-year pattern of poor attendance at combined board and applicable committee meetings, or a director has poor attendance in a single year with no disclosed rationale, we may vote against that individual. 0000042408 00000 n WebThe proxy voting record of each Fund for the most recent period ended June 30 of each year, commencing in 2006, is available to any unitholders of the Funds at any time after August 31 of that year by calling the number below. While we welcome any disclosures and commitments companies choose to make regarding Scope 3 emissions, we recognize that these are provided on a good-faith basis as methodology develops. Common circumstances are illustrated below: In addition, we recognize that board leadership roles may vary in responsibility and time requirements in different markets around the world. It is our view that climate change has become a key factor in many companies long-term prospects. It is our view that a majority of the directors on the board should be independent to ensure objectivity in the decision-making of the board and its ability to oversee management. BIS may support shareholder proposals requesting to put extraordinary benefits contained in supplemental executive retirement plans (SERP) to a shareholder vote unless the companys executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans. We will consider whether the transaction involves a dissenting board or does not appear to be the result of an arms-length bidding process. This includes, but is not limited to, settlement agreements arising from such behavior and paid for directly by the company. This better macro environment will support better economic growth, financial stability, job growth, productivity, as well as ecosystem stability and health outcomes. Foreign investing, especially in developing countries, has special risks such as currency and market volatility and political and social instability. The following issue-specific proxy voting guidelines (the Guidelines) summarize BlackRock Investment Stewardships (BIS) philosophy and approach to engagement and voting, as well as our view of governance best practices and the roles and responsibilities of boards and directors for publicly listed U.S. companies. Proposals to change a corporations form, including those to convert to a public benefit corporation (PBC) structure, should clearly articulate the stakeholder groups the company seeks to benefit and provide detail on how the interests of shareholders would be augmented or adversely affected with the change to a PBC. Nonetheless, in situations where there is a substantial or dominant shareholder, supermajority voting may be protective of minority shareholder interests, and we may support supermajority voting requirements in those situations. (go back), 17https://www.blackrock.com/corporate/literature/whitepaper/bii-managing-the-net-zero-transition-february-2022.pdf(go back), 18While guidance is still under development for a unified disclosure framework related to natural capital, the emerging recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD), may prove useful to some companies. 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