Director Essentials
Preparing the Board for Shareholder Activism
Learn about the board’s role in preparing for and responding to an activist challenge.
Governance Surveys
Center for Inclusive Governance
As many directors prepare for their spring 2019 proxy meetings, they will be addressing new developments in three areas:
Proxy voting. The United States Securities and Exchange Commission (SEC) is considering this topic in a November 15, 2018, roundtable, that could lead to rule changes.
Proxy access. Currently, 65 percent of S&P 500 companies have proxy access—that is, they have already amended their bylaws to permit inclusion of shareholder slates in the company proxy statement. The number of proxy access proposals saw a decline in 2018— down to 34 from 81 in 2015.
Proxy advisors. Advisors to institutional investors are once again coming under scrutiny for potential conflicts of interest.
This installment of the Director Essentials series analyzes these issues and others within the framework of proxy season fundamentals. Useful for first-time public company directors and those tasked with their onboarding, this document can also be used as a “refresher” for more experienced directors on the essentials of the proxy process.
How Boards Can Use This Resource
Note: Since publication in November 2018, the US Securities and Exchange Commission has adopted new rules for universal proxy cards in contested director elections. NACD's partner, Sidley, discusses the implications for directors in NACD’s 2024 Governance Outlook.
Proxy season is the time of year when most public companies hold their annual shareholder meetings. These events typically occur during the second quarter (April through June), with May being the busiest month among companies with a calendar fiscal year. The spring proxy season is a particularly busy time for investors (some of whom hold shares in hundreds or thousands of companies), for the advisors who serve those investors (a.k.a. proxy advisors), and for directors who serve on multiple boards. These investors, advisors, and directors may find themselves focusing on more than one company in a short period of time.
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