CalPERS has posted new “April 2026” versions of its proxy voting guidelines and executive compensation analysis framework, as previewed at a recent Investment Committee meeting. According to the Investment Committee presentation, one key change is to add a new policy to “hold director nominees accountable at companies that have abused Rule 14a-8 surrounding shareowner proposal submission (no-action process).” The policy indicates that CalPERS staff will consider each scenario on a case-by-case basis and may vote “against” any or all of the following:
– Board Chair
– Nominating Governance Committee Members
– Long-Tenured Directors
The policy also notes that staff may decide to run “vote no” campaigns on a case-by-case basis.
They also added a short policy on AI oversight.
Artificial Intelligence (AI) Board Oversight. We may withhold votes from director nominees where there is evidence of failed and/or insufficient oversight of AI-related risks.
As I noted above, CalPERS updated its executive compensation framework as well. See Liz’s blog on CompensationStandards.com for more.
– Meredith Ervine
T. Rowe Price also recently announced updated proxy voting guidelines for 2026. And they posted, for the first time, a pre-annual-meeting-season review that addresses the policy updates and shares T. Rowe’s perspectives on other key proxy-season topics.
Regarding the updated proxy voting guidelines, the season preview notes that T. Rowe has updated its overboarding policy to add more flexibility, citing prior instances in which an override was needed.
TRPA’s current policy guidelines state that we may vote against directors that exhibit such a high number of board commitments that it causes concerns about the director’s effectiveness. Traditionally in the Americas region, concerns about overboarding arise with:
(1) Any director who serves on more than five public company boards; or
(2) Any director who is CEO of a publicly traded company and serves on more than one additional public board.
However, in recent years there have been several instances that necessitated an override of this policy. The most common overrides include cases when a company’s subsidiary is also publicly traded and either shares the board with the subsidiary or has significant overlap between the two boards—or one of the companies included in the count is a non‑operating company, such as a special purpose acquisition company. As a result, for 2026 a director at a company in the Americas will be considered overcommitted if he or she:
(1) Serves on more than six public company boards; or
(2) Serves as a CEO of a publicly traded company and serves on more than two additional public boards.
Our longstanding approach has been to consider the nominees’ potential contribution including skills, experience and demographic background when deciding how to vote on director appointments. To better reflect our actual practice, we have implemented a new board composition guideline for all regions this year.
While not highlighted in the report, the 2026 guidelines also reflect changes to the board diversity policy. The 2025 guidelines included this:
Board diversity policy. Our experience leads us to observe that boards lacking in diversity represent a sub-optimal composition and a potential risk to the company’s competitiveness over time. We recognize diversity can be defined across a number of dimensions. However, if a board is to be considered meaningfully diverse, in our view some diversity across gender, ethnic, or nationality lines must be present. For companies in the Americas, we generally oppose the re-elections of Governance Committee members if we find no evidence of board diversity.
The 2026 guidelines now include:
Board composition policy. Our experience leads us to observe that boards, without a suitable mix of viewpoints to assess the challenges and opportunities the company faces, represent a potential risk to its competitiveness over time. We consider the nominees’ potential contribution, including skills, experience, and demographic background, and how they may broaden the range of perspectives reflected in the boardroom discussion. For companies in the Americas, we generally oppose the re-elections of Governance Committee members if we find the board composition does not reflect consideration of these factors.
Note: I’m not seeing any updates (yet) from T. Rowe Price Investment Management.
– Meredith Ervine
The Council of Institutional Investors (CII) is also out with its updated policies on corporate governance, released in mid-March. The one substantive addition is tucked away under “Accountability to Shareowners.” The addition is shown below in bold:
1.4 Accountability to Shareowners: Corporate governance structures and practices should protect and enhance a company’s accountability to its shareowners, and ensure that they are treated equally. An action should not be taken if its purpose is to reduce accountability to shareowners. When a jurisdiction meaningfully weakens protections for a company’s shareholders, the board should conduct a review and disclose the specific standard that was weakened, an analysis of options to preserve protections such as through private ordering, and the board’s rationale for its decision.
I assume this was motivated by some moves by Texas, including imposing ownership thresholds for derivative suits. I also assume CII didn’t have in mind the actions to limit proxy advisory activities, but if it does, that might eventually be applicable in quite a lot of states.
– Meredith Ervine
