Launched publicly in November 2014 by New York City Comptroller Scott Stringer and the New York City pension funds, the Boardroom Accountability Project is a groundbreaking campaign to give shareowners the right to nominate directors at U.S. companies using the corporate ballot, known as “proxy access.” If we want to ensure that companies are truly managed for the long-term, we need more diverse, independent and accountable directors. The ability to nominate directors is a fundamental shareowner right and the starting point for this transformation.
By submitting proxy access shareowner proposals to 75 companies at once in fall 2014, and working in close collaboration with other major institutional investors, Comptroller Stringer and the City’s pension funds sought to take a major first step to enact proxy access across the U.S. market.
The proposals requested a proxy access bylaw permitting shareowners that have collectively held three percent of the company for at least three years to nominate up to 25 percent of the board using the company’s proxy materials. The terms are identical to those included in a rule enacted by the Securities and Exchange Commission (SEC) in 2010 that provided proxy access at all U.S. public companies, but that was vacated by a federal court on procedural grounds.
The 75 companies included companies that failed to align executive compensation with business performance, companies with little or no apparent gender or racial diversity on their board, and carbon-intensive energy companies that are among the most vulnerable to long-term business risks related to climate change.
The 75 shareowner proposals produced very strong results:
- • Two-thirds of the proposals that went to a vote received majority support.
- • More than half of the 75 companies have enacted proxy access bylaws through January 8, 2015, including Chevron, Hasbro, Occidental Petroleum, Staples and Priceline.
In total, 115 companies have enacted meaningful proxy access through January 8th 2016, up from only six companies in November 2014, and many more are on the way. Many of these companies acted in response to proposals from New York City and others. Recognizing that proxy access is now inevitable, companies are also pro-actively adopting proxy access.
Momentum is clearly on our side for the 2016 proxy season. For 2016, Comptroller Stringer and the New York City pension funds have submitted proxy access proposals to 72 companies. They include 36 of the original 75 companies that haven’t yet enacted viable proxy access. Companies like ExxonMobil, Chipotle and Urban Outfitters. And they include 36 new companies, such as Boeing, Home Depot, Intel, Bank of New York Mellon, and Wells Fargo.