Last week I posted an UpTick about the rollout of ISS’s voting policies for 2015. This week saw what appears to be the completion of that rollout, and we were also blessed with the publication of Glass Lewis’s 2015 voting policies.
On a quick read, neither set of voting policies seems to contain anything shocking, but both sets continue the march towards what the proxy advisors see as shareholder democracy. To paraphrase Jules Feiffer, I sympathize with their aspirations, but in some ways it looks like shareholder tyranny. Both ISS and GL are adamant about two types of by-law amendments: those that make the loser pay in meritless lawsuits and those that arguably impact shareholder rights without getting shareholder approval. ISS also tinkers with shareholder proposals on CEO/board chair separation. GL is also concerned about by-law amendments and continues to rail against companies that don’t satisfactorily implement majority-approved shareholder proposals. GL also continues to focus “material” transactions with directors.
I really do sympathize with at least some of the aspirations of ISS and GL. However, their policies reinforce the notion – with which I’m not at all sympathetic – that shareholders have the right to second-guess each and every decision that the board makes. For example, why does ISS think that shareholders are in a better position than the board to determine the board’s leadership structure? And if the board has no business deciding on its own leadership structure, why give it the power to do anything at all?
We’ll be posting a more detailed analysis of the 2015 voting policies on The Securities Edge within the next few days. For the time being, let us know what you think of them (or of my views).