In a milestone event, ExxonMobil’s shareholders recently approved relatively progressive proxy access board provisions.
Proxy access provisions enable shareholders of a public company to submit director nominees and measures into the corporation’s annual shareholder proxy to be voted on by all shareholders.
The battle to obtain proxy access has been long and contentious (click here for my 2012 post, “Just a Small Leak”).
For an introduction to proxy access, click here for an article by the Council of Institutional Investors.
“Proxy access” is shorthand for a crucial mechanism that gives shareowners a meaningful voice in corporate board elections. It refers to the right of shareowners to place their nominees for director on a company’s proxy card. This lets investors avoid the cost of sending out their own proxy cards when they are dissatisfied with a corporate board and want to run their own candidates for director.
CII believes that proxy access would invigorate board elections and make boards more responsive to shareowners and more vigilant in their oversight of companies.
What makes the ExxonMobil vote so momentous is the percentage of the vote in favor and the fact that this vote was tinged with climate change controversy, not just good corporate governance (Click here).
The so-called proxy access measure was the first Exxon shareholder proposal since 2006 to be approved, and it was the only one of 11 proposals related to climate change to pass at meetings held Wednesday by Exxon and fellow U.S. oil giant Chevron Corp.
More than 60 percent of Exxon shareholders backed proxy access, which was narrowly defeated last year.
Perhaps this issue has reached a tipping point as ExxonMobil shareholders got a letter recommending acceptance by two of the largest US institutional shareholders, California’s CALPERS and the Comptroller of the City of New York representing NYC’s pension funds (click to read).
We’ll monitor developments on proxy access and report important milestones.
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