Policy Survey 2024: Responsiveness to Shareholder Opposition
This post provides an overview of a section of Glass Lewis’ 2024 Policy Survey, conducted to inform their annual “benchmark” policy guideline updates. Board Response to Failed Advisory Proposal Investors and non-investors expressed very different expectations for how a board should respond when an advisory management proposal does not receive majority support. The most popular […]
Dimitri Zagoroff is Senior Editor at Glass, Lewis & Co. This post is based on a Glass Lewis’ 2024 Policy Survey by Mr. Zagoroff, Brianna Castro, Courteney Keatinge, Chris Rushton, Eric Shostal, and Maria Vu.
This post provides an overview of a section of Glass Lewis’ 2024 Policy Survey, conducted to inform their annual “benchmark” policy guideline updates.
Board Response to Failed Advisory Proposal
Investors and non-investors expressed very different expectations for how a board should respond when an advisory management proposal does not receive majority support. The most popular answer among investors was that the board should generally refrain from the requested action (41.1%, vs 9.0% among non-investors). As one Canadian investor put it:
“Why put it to shareholder opinion if you aren’t going to follow their views?”
Other investors took a more balanced view:
“This would depend on the ask and the level of shareholder opposition.” (U.S. investor)
“In some cases, not proceeding may be impractical. For example, refusing to pay a CEO their new salary or trying to clawback bonuses will destabilize the business and may result in legal action against the company. But a majority vote against should still send a clear message to the Board that it must take action on the main issues raised.” (U.S. investor) (more…)
