Below are key takeaways from ISS’ recently released 2022 Europe Proxy Season Preview. The full report is available to institutional subscribers by logging into ProxyExchange 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.
- Gender diversity:
- Diversity requirements across European markets continue to evolve, with larger markets generally building upon existing requirements and a number of smaller markets introducing initial requirements for board composition and reporting thereof.
- A significant level of divergence remains across European markets with respect to the level of diversity required, as well as the timelines for implementation. However, the European Commission is expected to submit a pan-EU proposal in 2022 in line with its gender equality strategy for 2020-2025, expected to be a minimum of 40% gender diversity for boards.
- Non-financial reporting:
- A variety of markets have introduced requirements related to the reporting of non-financial issues via updated regulations or revisions to local best practice codes. This will provide a level of intra-market standardization, although a set of standards as part of a European Commission Directive is not expected until late 2022.
- Climate
- Building on 2021, further Say-on-Climate votes are anticipated at larger companies with significant climate-related risks. However, a material increase in the volume of these votes is not expected across Europe, given the continued lack of legal certainty regarding the content and structure of these resolutions.
- Remuneration:
- Following the implementation of SRD II legislation into local laws over the last few years, 2022 represents the first year in several markets where shareholders will vote on companies’ remuneration reports. These reports are also expected to provide greater insight into how remuneration committees have responded to the pandemic.
- More broadly, it is expected that companies will continue to provide an improved level of disclosure, although it remains the case that the European Commission has not yet published the long-expected reporting guidelines on remuneration.
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By European Governance Research
