Glass Lewis publishes its 2022 Proxy Voting and ESG Initiative Policy Guidelines

Glass Lewis publishes its 2022 Proxy Voting and ESG Initiative Policy Guidelines

On 16 November 2021, global corporate governance solutions provider, Glass Lewis, published its 2022 Proxy Voting Policy Guidelines for the UK, as well as the United States, Canada and Continental Europe and its 2022 ESG Initiatives Policy Guidelines.

The Proxy Voting Policy Guidelines set out Glass Lewis’ approach to making voting recommendations for shareholders on various annual general meeting agenda items, including director appointments and remuneration, board composition, balance sheet management and ESG issues. The ESG Initiative Policy Guidelines focus on the bases on which Glass Lewis will generally support shareholders submitting their own proposals and initiatives (or counter-proposals) to their board, particularly when they take the form of ESG-related resolutions at general meetings.

Both sets of guidelines are reviewed at least annually and tailored to the relevant regional governance and regulatory environments.

UK 2022 Proxy Voting Guidelines

Glass Lewis' voting recommendations will apply for AGMs in 2022. Revisions and updates cover the following areas:

  1. Amendments to its board diversity policies to reflect an expectation that FTSE 100 companies should appoint at least one director from a minority ethnic group (with a general recommendation against the re-election of nomination committee chairs at those companies which fail to do so, absent a compelling reason);
  2. Guidance regarding committee chairs where there is a recommendation against a committee chair but that chair is not standing for re-election, in which case Glass Lewis may recommend shareholders to vote against the re-election of long-standing committee members;
  3. Recommendations from Glass Lewis against the re-election of a remuneration committee chair if there are substantial concerns with the remuneration policy presented for shareholder approval and/or the pay practices outlined in the remuneration report;
  4. Improving disclosure of the board's oversight of material environmental and social issues in FTSE 100 companies by recommending against the re-election of governance committee chairs where these companies fall short in explicitly disclosing the board's role on these matters;
  5. Expansion of Glass Lewis' discussion of ESG initiatives and an 'Overall Approach to ESG';
  6. Evaluation of all shareholder proposals on a case-by-case basis in order to promote long-term shareholder value;
  7. Outline of Glass Lewis' current guidance on linking executive share incentives to ESG metrics;
  8. Clarifying that Glass Lewis will assess board-level gender diversity based upon how directors self-identify;
  9. Further detail to the Glass Lewis' expectations when share incentives are granted to directors who are direct or indirect substantial shareholders; and
  10. Clarifying its key considerations when analysing shareholder votes on a company’s remuneration policy and the remuneration report. 

UK 2022 Policy Guidelines – ESG Initiative

Revisions and updates cover the following issues:

  1. Key factors taken into consideration when evaluating companies’ board-level oversight of ESG-related matters as well as the approach to holding directors accountable for ESG-related risks;
  2. Approach to proposals from management to approve climate transition plans ("Say on Climate" votes) as well as its standpoint on shareholder proposals asking companies to adopt such votes (generally opposed to them on the basis that a company's business strategy is best determined by its board);
  3. Removal of guidance relating to obsolete topics which have not arisen as part of shareholder proposals for several years (including GMOs, for example); and
  4. Codification of Glass Lewis' approach where shareholder proposals request that companies lower the threshold required to initiate written consent.

The Glass Lewis UK 2022 Proxy Voting Policy Guidelines can be found here, and the ESG Guidelines can be found here


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