From Boardspan this Week:
Shareholder Activism and ESG: What Comes Next, and How to Prepare
It pays to be a few steps ahead of shareholder activism. Read this Boardspan Library piece below on what comes next and how to prepare for upcoming proxy contests.
“Investors increasingly view corporate attention to ESG criteria as closely linked with business resilience, competitive strength, and financial performance. The world’s largest institutional investors and pension funds have stated their faith in the potential of ESG to unlock shareholder value and to make companies and markets more sustainable. Their support has afforded ESG investing and operating principles added legitimacy and credibility…Institutional investors have intensified engagement with public companies to advocate for ESG-oriented policies and disclosures. They have also adjusted their proxy voting policies correspondingly.” SIDLEY via BOARDSPAN
Across the Board
The Complexities of Finding a Retail CEO
Half of the eight Fortune 500 companies without a permanent CEO are retailers. Fortune looks at why an industry struggling in the wake of COVID also struggles to find leadership.
"What’s tripping boards up is the one-two punch of a CEO job that is more complex than ever. The retail industry, in particular, has generally become less diligent about cultivating a leadership talent pipeline that generates executives able to handle the industry’s deep challenges…For decades, retailers favored the venerated “merchant prince” who chose what products to sell and was seldom questioned or called upon to deal directly with prosaic matters like distribution and operations…Now, a CEO needs to have not only an instinct for what products customers want but also chops in other areas, notably supply-chain management, cybersecurity, sourcing, e-commerce, and store operations, as well as the ability to build teams and adopt a style of empathetic and inclusive leadership that employees expect of today’s CEOs.” FORTUNE
Cultivating a Base of Quality Shareholders
Shareholders are not all the same. You need to approach them differently, especially regarding today’s most complex board topics. This article, taken from the 37th Annual Francis G. Pileggi Distinguished Lecture in Law at Delaware Law School, lays out the differences.
“Shareholders are not monolithic. They vary widely based on many characteristics. They have different time horizons and degrees of concentration. They may be deferential or antagonistic to management. Companies have long tried to cultivate their shareholder base accordingly.” HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERNANCE
More Black Women are Gaining Corporate Board Seats
Companies in the S&P 500 added more Black women to their boards in 12 months spanning 2021 and 2022 than in any similar period in at least the past 15 years. The Wall Street Journal looks at how it happened and the work that is still being done.
“In part, the trend reflects the fact that companies are increasingly seeking board members who reflect their workforce, customer base and other stakeholders…But the increase in Black women directors is also being driven by pressure and, in some cases, mandates from state legislators, regulators and investors…Merline Saintil and Robin Washington…received an influx of calls after (George) Floyd’s death, asking them what experienced women of color they could recommend as corporate directors. The two friends, Black women who between them hold board seats at companies including Google parent Alphabet Inc., Honeywell International Inc. and Gitlab Inc., decided to form Black Women on Boards to boost awareness of the issue of the composition of boards and create a more cohesive network for Black women leaders…The group has helped place 30 Black women on private, public and advisory boards, Ms. Saintil says.” WALL STREET JOURNAL
