In addition to updating its voting guidelines for director elections and other more standard proxy statement proposals, Glass Lewis also updated its separate Policy Guidelines on ESG Initiatives, which now stands at 40 pages. These Guidelines identify factors Glass Lewis considers when making its case-by-case recommendations on shareholder proposals and related initiatives. Here’s a summary of this year’s changes:
Environmental and Social Risk Oversight: Glass Lewis clarified the factors it considers when evaluating companies’ board-level oversight of ESG-related matters. It also clarified its approach to holding directors accountable for ESG-related risks.
Say on Climate: Glass Lewis clarified its approach to management proposals asking shareholders to approve climate transition plans as well as shareholder proposals asking companies to adopt such a vote. Glass Lewis maintains concerns relating to the Say on Climate vote on the basis of shareholders approving a company’s business strategy, particularly given that sufficient information to fully evaluate the plan is often not available to shareholders. Accordingly, Glass Lewis will generally oppose shareholder proposals requesting that companies adopt a Say on Climate vote.
However, when companies have adopted such a vote, and are asking shareholders to weigh in on their climate-related strategies, Glass Lewis will evaluate companies’ climate transition plans on a case-by-case basis. In its evaluation, it will consider companies’ disclosure of the board’s role in setting company strategy in the context of the Say on Climate vote as well as disclosure on how the board intends to interpret the vote results and its engagement with shareholders on the issue. In addition, Glass Lewis will evaluate each climate transition plan in the context of each companies’ unique operations and risk profile.
Updates: Glass Lewis removed guidelines referencing the MacBride Principles, Genetically Modified Organisms, and Sustainable Forestry, as there have not been shareholder proposals on these topics in a number of years. Should proposals on these topics begin to be submitted to shareholder votes in the future, it will likely reincorporate its views on these proposals into future versions of these guidelines.
Written Consent: Glass Lewis codified its approach to shareholder proposals requesting that companies lower the threshold required to initiate written consent. When evaluating these proposals, it will generally recommend in favor of lowering the ownership threshold when the company has no special meeting provision, or only allows shareholders owning more than 15% of its shares the ability to call a special meeting. It will generally oppose lowering the ownership threshold necessary to initiate written consent if the company in question has a 15% or lower special meeting threshold.
– Liz Dunshee