Where several measures are grouped into one proposal, BIS may reject certain positive changes when linked with proposals that generally contradict or impede the rights and economic interests of shareholders. 0000042408 00000 n Consistent with our approach to voting on directors, we seek to hold the audit committee of the board responsible for overseeing the management of the independent auditor and the internal audit function at a company. We recognize that some companies may report using different standards, which may be required by regulation, or one of a number of private standards. We use third party research, in addition to our own analysis, to evaluate existing and proposed compensation structures. Scope The guiding principle of this Policy is that voting rights should be exercised and Performance-based compensation should include metrics that are relevant to the business and stated strategy and/or risk mitigation efforts. We generally do not favor programs focused on awards that require performance levels to be met and maintained for a relatively short time period for payouts to be earned, unless there are extended vesting and/or holding requirements. There should be a clear link between variable pay and company performance that drives sustained value creation for our clients as shareholders. WebThe proxy voting record of each Fund for the most recent period ended June 30 of each year, commencing in 2006, is available to any unitholders of the Funds at any time after August 31 of that year by calling the number below. WebRanked-Choice Voting (also known as instant runoff voting) allows voters to rank a first, second and third choice candidate for a single office. We also recognize the potential benefits of dual class shares to newly public companies as they establish themselves; however, these structures should have a specific and limited duration. We engage an outside advisor to make initial, customized recommendations based on these Proxy Voting Principles and Guidelines. We encourage boards to disclose their approach to evaluations, including objectives of the evaluation; if an external party conducts the evaluation; the frequency of the evaluations; and, whether that evaluation occurs on an individual director basis. 0000063266 00000 n Boards should clearly explain the economic and strategic rationale for any proposed transactions or material changes to the business. 0000042526 00000 n 0000005611 00000 n Voting guidelines. This includes, but is not limited to, settlement agreements arising from such behavior and paid for directly by the company. As such, DWSs authority and responsibility to vote such proxies depend upon its contractual relationships with its clients or other delegated authority. DWS has delegated responsibility for effecting its advisory clients proxy votes to Institutional Shareholder Services (ISS), an independent thirdparty proxy voting specialist. 0000013107 00000 n As part of this consideration, we encourage companies to produce sustainability-related disclosures sufficiently in advance of their annual meeting so that the disclosures can be considered in relevant vote decisions. BIS generally supports proposals to seek exclusive forum for certain shareholder litigation. 0000013449 00000 n It allows boards to have deeper discussions and make more resilient decisions. It is our view that long-term shareholders should have the opportunity, when necessary and under reasonable conditions, to nominate directors on the companys proxy card.[19]. 0000002485 00000 n [16] Yet, the path ahead is deeply uncertain and uneven, with different parts of the economy moving at different speeds. BIS may support shareholder proposals requesting to put extraordinary benefits contained in supplemental executive retirement plans (SERP) to a shareholder vote unless the companys executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans. We may vote against the audit committee members where the board has failed to facilitate quality, independent auditing. In particular, where a director maintains a Chair role of a publicly listed company in European markets, we may consider that responsibility as equal to two board commitments, consistent with our EMEA Proxy Voting Guidelines. In the event of a proposal for are verse split that would not proportionately reduce the companys authorized stock, we apply the same analysis we would use for a proposal to increase authorized stock. We will evaluate the economic and strategic rationale behind the companys proposal to reincorporate on a case-by-case basis. We look to companies to disclose short-, medium-, and long-term targets, ideally science-based targets where these are available for their sector, for Scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how their targets are consistent with the long-term economic interests of their shareholders. BIS may support a request to reprice or exchange underwater options under the following circumstances: BIS may also support a request to exchange underwater options in other circumstances, if we determine that the exchange is in the best interests of shareholders. Corporate Governance Management teams of companies are accountable to the boards of directors and directors of publicly held companies are accountable to shareholders. As part of their responsibilities, board members owe fiduciary duties to shareholders in overseeing the strategic direction, operations, and risk management of the company. We may consider comparable transaction analyses provided by the parties financial advisors and our own valuation assessments. This makes it possible to elect local Boards should disclose how the corporate governance structures adopted upon a companys initial public offering (IPO) are in shareholders best long-term interests. Past performance is no guarantee of future results. Companies that build strong relationships with their key stakeholders are more likely to meet their own strategic objectives, while poor relationships may create adverse impacts that expose a company to legal, regulatory, operational, and reputational risks. 2. On November 11, 2019, Institutional Shareholder Services (ISS) released its 2020 Proxy Voting Guidelines, which are generally effective for meetings on or after February 1, 2020. 2036 41 Common circumstances are illustrated below: Directors should generally be elected by a majority of the shares voted. These Guidelines are not intended to limit the analysis of individual issues at specific companies or provide a guide to how BIS will engage and/or vote in every instance. We will evaluate these disclosures to inform our view of how a company is managing material nature-related risks and opportunities, as well as in our assessment of relevant shareholder proposals. We may also consider whether executive and/or board members financial interests appear likely to affect their ability to place shareholders interests before their own, as well as measures taken to address conflicts of interest, We prefer transaction proposals that include the fairness opinion of a reputable financial advisor assessing the value of the transaction to shareholders in comparison to recent similar transactions, Whether we determine that the triggering event is in the best interests of shareholders, Whether management attempted to maximize shareholder value in the triggering event, The percentage of total premium or transaction value that will be transferred to the management team, rather than shareholders, as a result of the golden parachute payment, Whether excessively large excise tax gross-up payments are part of the pay-out, Whether the pay package that serves as the basis for calculating the golden parachute payment was reasonable in light of performance and peers, Whether the golden parachute payment will have the effect of rewarding a management team that has failed to effectively manage the company, The company has experienced significant stock price decline as a result of macroeconomic trends, not individual company performance, Directors and executive officers are excluded; the exchange is value neutral or value creative to shareholders; tax, accounting, and other technical considerations have been fully contemplated, There is clear evidence that absent repricing, employee incentives, retention, and/or recruiting may be impacted, Disclose the identification, assessment, management, and oversight of material sustainability related risks and opportunities in accordance with the four pillars of TCFD, Publish material, investor-relevant, industry-specific metrics and rigorous targets, aligned with SASB (ISSB) or comparable sustainability reporting standards. However, the final voting decision is independent and voting authority rests During a CEO transition, companies may elect for the departing CEO to maintain a role in the boardroom. We consider the share price over multiple time periods prior to the date of the merger announcement. As noted above, highly qualified, engaged directors with professional characteristics relevant to a companys business enhance the ability of the board to add value and be the voice of shareholders in board discussions. Nonetheless, in situations where there is a substantial or dominant shareholder, supermajority voting may be protective of minority shareholder interests, and we may support supermajority voting requirements in those situations. In such instances, we typically look for the board to have appropriate independent leadership structures in place. We will evaluate these instances on a case-by-case basis. Payouts to executives should reflect both the executives contributions to the companys ongoing success, as well as exogenous factors that impacted shareholder value. Weball proxies based on the RBC GAM Proxy Voting Guidelines . (go back), 3A BDC is a special investment vehicle under the Investment Company Act of 1940 that is designed to facilitate capital formation for small and middle-market companies(go back), 4CTo this end, we do not view shareholder proposals asking for the separation of Chair and CEO to be a proxy for other concerns we may have at the company for which a vote against directors would be more appropriate. We acknowledge that these factors may also play into the various elements of diversity that a board may attract. Shareholders should have the opportunity to participate in the annual and special meetings for the companies in which they are invested, as these meetings facilitate an opportunity for shareholders to provide feedback and hear from the board and management. The following identifies the maximum number of boards on which a director may serve, before BIS considers them to be over-committed: How diversity, including demographic factors and professional characteristics, is considered in board composition, given the companys long-term strategy and business model, How directors professional characteristics, which may include domain expertise such as finance or technology, and sector- or market-specific experience, are complementary and link to the companys long-term strategy, The process by which candidates for board positions are identified, including whether professional firms or other resources outside of incumbent directors networks are engaged to identify and/or assess candidates, and whether a diverse slate of nominees is considered for all available board nominations, The Independent Chair or Lead Independent Director, members of the nominating/governance committee, and/or the longest tenured director(s), where we observe a lack of board responsiveness to shareholders, evidence of board entrenchment, and/or failure to plan for adequate board member succession, The chair of the nominating/governance committee, or where no chair exists, the nominating/governance committee member with the longest tenure, where board member(s) at the most recent election of directors have received against votes from more than 25% of shares voted, and the board has not taken appropriate action to respond to shareholder concerns. We will also evaluate whether there is general consistency between a companys stated positions on policy matters material to their strategy and the material positions taken by significant industry groups of which they are a member. Further, if a company qualifies as an emerging growth company (an EGC) under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), we will give consideration to the NYSE and NASDAQ governance exemptions granted under the JOBS Act for the duration such a company is categorized as an EGC. In addition, companies that have implemented dual or multiple class share structures should review these structures on a regular basis, or as company circumstances change. (go back), 15The global aspiration to achieve a net-zero global economy by 2050 is reflective of aggregated efforts; governments representing over 90% of GDP have committed to move to net-zero over the coming decades. Proposals to change a corporations form, including those to convert to a public benefit corporation (PBC) structure, should clearly articulate the stakeholder groups the company seeks to benefit and provide detail on how the interests of shareholders would be augmented or adversely affected with the change to a PBC. Where a company has not adequately demonstrated, through actions and/or disclosures, how material issues are appropriately identified, managed, and overseen, we will consider voting against the re-election of those directors responsible for the oversight of such issues, as indicated below. We also favor prompt recoupment from any senior executive whose behavior caused material financial harm to shareholders, material reputational risk to the company, or resulted in a criminal proceeding, even if such actions did not ultimately result in a material restatement of past results. Lastly, we look for shareholder approval of poison pill plans within one year of adoption of implementation. The information provided here is neither tax nor legal advice. We will generally engage new companies on topics such as classified boards and supermajority vote provisions to amend bylaws, as we think that such arrangements may not be in the best interests of shareholders over the long-term. We encourage companies to disclose how their capital allocation to various energy sources is consistent with their strategy. We frequently oppose proposals requesting authorization of a class of preferred stock with unspecified voting, conversion, dividend distribution, and other rights (blank check preferred stock) because they may serve as a transfer of authority from shareholders to the board and as a possible entrenchment device. The information on this website does not constitute an offer to sell, or a solicitation of an offer to purchase, securities in any jurisdiction to any person to whom it is not lawful to make such an offer. Foreign investing, especially in developing countries, has special risks such as currency and market volatility and political and social instability. (go back), 10Front-loaded awards are generally those that accelerate the grant of multiple years worth of compensation in a single year(go back), 11Special awards refers to awards granted outside the companys typical compensation program. We generally view the boards discretion to establish voting rights on a when-issued basis as a potential anti-takeover device, as it affords the board the ability to place a block of stock with an investor sympathetic to management, thereby foiling a takeover bid without a shareholder vote. 0000001137 00000 n As such, as long-term investors, we are interested in understanding how companies may be impacted by material climate-related risks and opportunitiesjust as we seek to understand other business-relevant risks and opportunitiesand how these factors are considered within their strategy in a manner that is consistent with the companys business model and sector. Investing involves risk, including possible loss of principal. WebCanada Proxy Voting Guidelines for TSX-listed Companies; Canada Proxy Voting Guidelines for Venture Companies; Canada Advance Notice Requirements FAQ; In assessing mergers, acquisitions, or other transactions including business combinations involving Special Purpose Acquisition Companies (SPACs) BIS primary consideration is the long-term economic interests of our clients as shareholders. 0000002290 00000 n BIS will also consider the average board tenure to evaluate processes for board renewal. Companies should also disclose any material supranational standards adopted, the industry initiatives in which they participate, any peer group benchmarking undertaken, and any assurance processes to help investors understand their approach to sustainable and responsible business conduct. As stewards of our clients investments, BlackRock believes it has a responsibility to engage with management teams and/or board members on material business issues and, for those clients who have given us authority, to vote proxies in the best long-term economic interests of their assets. 0000012093 00000 n For example, we recognize that topics around taxation and tax reporting are within the domain of local, state, and federal authorities. WebGlass Lewis 2023 Proxy Voting Policy Guidelines are now available for the United States and Canada, Continental Europe, the UK, and ESG. Additionally, we may oppose shareholder proposals requesting the right to act by written consent if the company already provides a shareholder right to call a special meeting that offers shareholders a reasonable opportunity to raise issues of substantial importance without having to wait for management to schedule a meeting. Increasingly, we see leading boards adding members whose experience deepens the boards understanding of the companys customers, employees, and communities. A growing number of companies, financial institutions, as well as governments, have committed to advancing decarbonization in line with the Paris Agreement. BIS will generally support annual advisory votes on executive compensation. Where a standardized proxy access provision exists, we will generally oppose shareholder proposals requesting outlier thresholds. (go back), 19BlackRock is subject to certain regulations and laws in the United States that place restrictions and limitations on how BlackRock can interact with the companies in which we invest on behalf of our clients, including our ability to submit shareholder proposals or elect directors to the board. Rather, support for such a proposal might arise in the case of overarching and sustained governance concerns such as lack of independence or failure to oversee a material risk over consecutive years(go back), 5This table is for illustrative purposes only. 1 Proxy Voting by Investment Advisers, Release No. At the board level, appropriate governance structures and responsibilities allow for effective oversight of the strategic implementation of material sustainability issues. 0000014951 00000 n Where we believe a companys disclosures or practices fall short relative to the market or peers, or we are unable to ascertain the board and managements effectiveness in overseeing related risks and opportunities, we may vote against members of the appropriate committee or support relevant shareholder proposals. 2023 Dodge & Cox. 2023 Renaissance Technologies LLC. We encourage boards to periodically review director qualifications and skills to ensure relevant experience and diverse perspectives are represented in the boardroom. They can be adapted and customized for use by foundations, endowments, asset managers, and retail investors. There may be legitimate instances where underwater options create an overhang on a companys capital structure and a repricing or option exchange may be warranted. An offering may be made only by delivery of a confidential offering memorandum to appropriate investors. The views and strategies described may not be suitable for all investors. Clear and consistent disclosures on these matters are critical for investors to make an informed assessment of a companys HCM practices. 0000042640 00000 n Goals, and the processes used to set these goals, should be clearly articulated and appropriately rigorous. 0000012172 00000 n Where a director serves on an excessive number of boards, which may limit their capacity to focus on each boards needs, we may vote against that individual. Web the criteria for the active exercise of voting rights are clearly regulated; conflicts of interest are identified and addressed. Our publicly available commentary provides more information on our approach to HCM. Without a voting mechanism to immediately address concerns about a specific director, we may choose to vote against the directors up for election at the time (see Shareholder rights for additional detail). It is in this context that we are interested in diversity in the boardroom. &/%C`6c l`T8N! 0000033560 00000 n Where companies are unwilling to voluntarily implement one share, one vote within a specified timeframe, or are unresponsive to shareholder feedback for change over time, we generally support shareholder proposals to recapitalize stock into a single voting class. Where we find that shareholder protections are diminished, we may support reincorporation if we determine that the overall benefits outweigh the diminished rights. They are to be applied with discretion, taking into consideration the range of issues and facts specific to the company, as well as individual ballot items at shareholder meetings. We generally view golden parachutes as encouragement to management to consider transactions that might be beneficial to shareholders. We generally support stock splits that are not likely to negatively affect the ability to trade shares or the economic value of a share. These guidelines are also intended to inform all investors on how to vote in an ESG-aligned way. Proxy Voting Guidelines 2022. These disclosures should also include the accountability and voting mechanisms that would be available to shareholders. trailer <<745C615CB068466D8BA2B6F1B596C766>]/Prev 714575/XRefStm 2073>> startxref 0 %%EOF 2076 0 obj <>stream We will review a proposed transaction to determine the degree to which it has the potential to enhance long-term shareholder value. Shareholders should have the opportunity to review substantial governance changes individually without having to accept bundled proposals. 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