April 11, 2022

Transcript: “Shareholder Insights – 2022 Priorities”

We’ve posted the transcript for our recent webcast for members, “Shareholder Insights: 2022 Priorities.” This was a very informative discussion amongst Council of Institutional Investors’ Glenn Davis, Dimensional Fund Advisors’ Kristin Drake, Sustainable Governance Partners’ Rob Main, and Federated Hermes – International’s Tim Youmans. Here’s an interesting point raised by Rob & Tim:

Main: As we’ve entered into this 2022 season, it does feel like the burden of proof when it comes to shareholder proposals has shifted.

If I think back three, four, five years ago when there was a proposal, the clear burden of proof was on the shareholder proposal proponent. Now, it does feel like the notion of supporting shareholder proposals is becoming more mainstream. There is an inclination from the proxy advisors, but I think increasingly from the mainstream institutional investors as well, who start at a point of supporting the proposal and then must be convinced to walk it back if they’re not going to support that specific proposal at the company. I don’t know if there’s any reactions to that view from my fellow panelists.

Youmans: This is a good segue into a trend that’s happening, which is if you look at the leadership last year of IBM, Wendy’s, arguably Morgan Stanley, BlackRock, and then also on responses to racial equity audits and then on the board of GE regarding climate shareholder proposals, we are seeing more boards supporting shareholder proposals. That’s very interesting.

When that happens, the board can then seize the narrative, and pretty much control the entire discussion about this. It’s moving beyond the shift that you talked about, Rob. Boards are being self-active holders of their own narrative. This is a very interesting trend, and we hope to see more of this.

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Liz Dunshee