June 24, 2005

Pfizer’s Novel Approach to Majority Voting

This morning at the Society’s National Conference, Peggy Foran discussed how Pfizer just announced how their company amended their corporate governance guidelines so that any director who receives a majority withheld vote is required to tender their resignation. The company’s board can then choose whether to accept the tender – which allows for the board’s judgement to be exercised.

This is akin to the similar provision that exists in many corporate governance guidelines regarding change in job responsibility for a director. When I get back from vacation, in a podcast, Peggy will explain why they did it, the issues involved in the form of a written tender, etc.

Letter from Council of Institutional Investors on Majority Voting

This query was recently posted in the “Q&A Forum”: “We received a letter from CII asking us to adopt a policy regarding majority voting for directors. According to CII’s web site, they sent the letter to 1,500 of the largest US companies. I am interested in how others who received this letter plan to respond.”

Here was my response: “Just listened to a discussion on this at the Society’s National Conference – must folks seem to be taking a “wait n’ see” approach to what others do (and then likely will respond with a letter that says their board is closely studying the issue as there a lot of groups currently deliberating the issues and presenting their findings in the near future).” Note that the CII’s letter notes that any responses will be posted on their website!