TheCorporateCounsel.net

Hat tip to Aon’s Karla Bos for alerting us that State Street Global Advisors has released its “Global Proxy Voting & Engagement Policy” – effective for voting decisions beginning March 26, 2024. This year, SSGA has centralized its standalone policies for specific markets and environmental & social factors into one Global Policy. That is a welcome change for those of us who are charged with keeping all the ins, outs & what-have-yous in our heads. I’m sure it was no small feat for the SSGA team to make it happen. The Global Policy includes these sections:

1. Overview of SSGA’s stewardship and voting program

2. Overview of proxy voting & engagement principles – effective board oversight, disclosure, shareholder protection, shareholder proposals, and engagement

3. Standalone sections addressing each of these principles

4. An appendix that sets forth SSGA’s criteria for “quality disclosure” on topics that are commonly the subject of shareholder proposals – climate disclosure, DEI disclosure, etc.

SSGA published this summary to highlight the substantive policy changes that were made as part of this update, which appear to primarily relate to director overboarding. Here’s an excerpt:

Beginning in 2024, we consider if a company publicly discloses its director time commitment policy (e.g., within corporate governance guidelines, proxy statement, company website). This policy or associated disclosure must include:

• Description of the annual review process undertaken by the nominating committee to evaluate director time commitments

• Numerical limit(s) on public company board seat(s) the company’s directors can serve on

For companies in the S&P 500, we may vote against the nominating committee chair at companies that do not publicly disclose a policy compliant with the above criteria, or do not commit to doing so within a reasonable timeframe.

For other companies in certain markets (such as the US non-S&P 500) that do not publicly disclose a policy compliant with the above criteria, we will consider the number of outside board directorships that the company’s non-executive and executive directors may undertake. Thus, State Street Global Advisors may take voting action against a director who exceeds the number of board mandates listed below:

• Named Executive Officers (NEOs) of a public company who sit on more than two public company boards

• Non-executive board chairs or lead independent directors who sit on more than three public company boards

• Non-executive directors who sit on more than four public company boards

If a director is imminently leaving a board and this departure is disclosed in a written, time-bound and publicly available manner, we may consider waiving our withhold vote when evaluating the director for excessive time commitments.

SSGA had previewed this update in a letter last year, so it shouldn’t come as a surprise. Although the summary doesn’t call out any other big updates, if SSGA is a significant shareholder for your company, it is worth viewing this year’s Global Policy as a “reset” that should be reviewed in full. Luckily, it is much easier to do that now that the policies are all in one document.

– Liz Dunshee