August 28, 2020

2020 U.S. Director Election & Governance Shareholder Proposals Proxy Season Review

Below are key takeaways from ISS’ recently released 2020 U.S. Director Election & Governance Shareholder Proposals Proxy Season Review. The full report is available to institutional subscribers by logging into ISS Link then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.

  • COVID-19  dramatically altered the format of shareholder meetings. Health concerns relating to the global coronavirus pandemic caused the majority of U.S. companies to hold virtual-only shareholder meetings, leading to challenges for some shareholders.
  • Lack of board gender diversity becomes a factor in directors receiving less-than-majority support: While the number of companies maintaining an all-male board continues to diminish, now at less than 200 companies within the Russell 3000 Index, the lack of board gender diversity became a significant driver of failed director votes. 
  • Written consent-related shareholder proposals take prominence: Proponents focused their efforts on shareholder proposals regarding written consent rights, presenting 60 proposals on ballot in the first half of 2020, the most in the past 10 years.
  • Shareholder proposals requesting an independent board chair saw rising support and some integrated ESG concerns: Ending a nearly two-year drought, two shareholder proposals requesting independent board leadership received majority support, and the median level of support for all independent chair proposals increased. Additionally, for the first time, certain proponents highlighted environmental and social risk oversight concerns as a basis for a change in board leadership.

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