Proxy Access: Top 3 Things to Know for the 2016 Proxy Season

Using Lessons Learned from 2015 to prepare for the 2016 Season

As part of Nasdaq’s commitment to governance, the Nasdaq Directors Desk’s team hosted the first Board Education webinar, titled Proxy Access: Lessons Learned from the 2015 Proxy Season. The panellists, including Darla Stuckey, CEO, Society of Corporate Secretaries, AJ Kess, Partner, Simpson Thacher & Bartlett, Yafit Cohn, Associate, Simpson Thacher & Bartlett, Peter Tomaszewski, VP, D.F. King, and Nasdaq’s own David Strandberg, Chief Counsel, shared their perspective on the lessons learned from the season.

We’re delighted that the panellists were able to provide their insight to board members and governance professionals during the hour-long webcast, noting the access trends identified during the season. In addition to the webcast, Simpson Thacher has also prepared a series of memos (Special Meeting Proposals, Independent Chair Proposals, Proxy Access Proposals) on the topic.

It was particularly interesting to hear that in 2015 there was a trend in agenda-driven issues of political interest: climate change, board diversity and say-on-pay. As we know, debates on these issues have been ongoing for some time now - and on both sides of the Atlantic - and they certainly remain hot topics for governments and regulators globally. It’ll be interesting to see if they feature again next year.

The top three key takeaways from the event, in preparation for 2016, are that issuers and in-house Counsel should consider the following:

  • Educate the Board. The board of directors should be prepared for the 2016 proxy season by being informed about the trends that have developed during the current proxy season, as well as the advantages and disadvantages of pursuing each potential option for responding to a proxy access shareholder proposal.
  • Evaluate the Company’s Shareholder Base. As noted above, there is no consensus among the large institutional shareholders on the issue of proxy access. Given the strong link between a company’s shareholder base and its voting results on proxy access shareholder proposals, issuers should analyze their shareholder base and their shareholders’ policies on proxy access and should begin to engage their largest shareholders.
  • Consider the Proxy Access Structure, If Any, Appropriate for the Company. To the extent a company is open to voluntarily adopting a proxy access bylaw, it should consider what thresholds it would be comfortable with and what “bells and whistles” it might want to include in the provision.

The Corporate Secretary has to be increasingly well prepared to brief the Board on proxy access, including a thorough analysis of the shareholder base, and we hope that providing contextual content like this helps to achieve that goal.

Webcast: To access the on-demand recording, click here.

Simpson Thacher Memos: To access the memos, click on one of the following links: Special Meeting Proposals, Independent Chair Proposals, Proxy Access Proposals

Additional Governance Resources

If you would like additional educational content on governance and managing a board, please visit the Directors Desk Resources page, where you can find whitepapers such as, Engaging Shareholder Activists, or learn more about our online board portal’s latest features and highlights.

The opinions expressed by the author of this post and those providing comments are theirs alone, and do not reflect the opinions of The NASDAQ OMX Group, Inc. or any of its subsidiaries (“Nasdaq”). Nasdaq is not responsible for the accuracy or completeness of any of the information herein or any information found by following any link on this site.
Blake Stephenson -- After being called to the English Bar in 2007, Blake has held governance, risk and compliance roles and has had a particular focus in regulatory compliance and good governance in UK markets infrastructure. His experience in this regard is from SIX Swiss Exchange and the UK's Financial Services Authority (now Financial Conduct Authority), where he supervised the London Stock Exchange Group. Blake also spent time as an advocate towards the European political institutions while working at the Futures and Options Association (now FIA Europe). Since joining NASDAQ in 2013 and before joining the Directors Desk management team in 2015, Blake was the Associate General Counsel in London, ensuring regulatory and governance compliance for NASDAQ's London interests. In addition to being called to the Bar, Blake has a degree with honours from the University of Kent, Canterbury, a Graduate Diploma in Law and a CISI Diploma in Investment Compliance.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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