Below are key takeaways from ISS’ recently released 2023 Proxy Season Preview & 2022 Review – United Kingdom. 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.
- Board diversity: New requirements under revisions to the UK’s Listing Rules come into effect in 2023. These require boards to report information and disclose against new “comply or explain” targets on gender and ethnic board and senior leadership diversity. The new targets include that boards should comprise at least 40% women (of whom at least one should be in a senior Board role); and at least one director should be from an ethnic minority background.
- Remuneration: A paradigm in 2022 was high bonus levels, driven by better than expected recovery from the pandemic. So-called “windfall gains” will be a focus in 2023, as share awards granted during the trough of 2020 come to fruition.
- Social factors: Against the backdrop of the cost-of-living crisis and industrial strife in the UK, increased focus on pay and conditions among the general workforce is a likely theme for 2023.
- Climate: A number of companies in the mining, energy, and utilities sectors submitted climate transition plans for shareholder approval with say-on-climate votes in 2022, and many of these will seek approval for progress against their goals in 2023. New mandatory climate-related financial disclosure requirements will also take effect during the year to come.
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By: Martin Lin, Chris Osborne, Mary Punch, Lea Ramsler, Joseph Vear, Erifyli Vologianni
