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