2023 Latin America Proxy Season Review

Below are key takeaways from ISS’ recently released 2023 Proxy Season Review – Latin America. 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.

• Meeting format: The post-pandemic adoption of virtual-only and hybrid meetings appears to have permanently changed the governance landscape in Brazil, the largest country in Latin America, where virtual and hybrid meetings now account for 71 percent of all proxy season meetings, with most being virtual-only meetings. The side effect of the wide adoption of virtual general assemblies appears to have been an even greater concentration of meetings in the last four business days of the month of April.
  
• Low board independence level: Majority-independent boards remain the exception in the Latin America region. The average independence level of the companies covered by ISS with board elections in the 2023 proxy season varied between 44.2 percent (Brazil) and 22.6 percent (Chile).
  
• Gender diversity: Board gender diversity remained modest in Latin America during the 2023 proxy season, when 27 percent of the ISS-covered companies that held board election continued to have all-male boards.
  
• Binding say-on-pay in Brazil: Although failed say-on-pay proposals in Brazil remain rare due to the majority controlled ownership structure of many companies in the market, at least three companies recorded failed say-on-pay proposals during the 2023 proxy season and 7.2 percent of the companies covered in Brazil (16 companies) registered less than 70 percent support for their say-on-pay resolutions, signaling ongoing shareholder concerns with remuneration proposals in the country.
  
• Other ongoing governance concerns: Lack of timely disclosure of director nominees, specifically in the Spanish-speaking markets, and high meeting concentration in the region remain as ongoing concerns in Latin America.

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