Large-Scale Governance Reforms in S&P 500 Companies

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2013-02-13

Summary:

Editor’s Note: Lucian Bebchuk is the Director of the Shareholder Rights Project (SRP), Scott Hirst is the SRP’s Associate Director, and June Rhee is the SRP’s Counsel. The SRP, a clinical program operating at Harvard Law School, works on behalf of public pension funds and charitable organizations seeking to improve corporate governance at publicly traded companies, as well as on research and policy projects related to corporate governance. Any views expressed and positions taken by the SRP and its representatives should be attributed solely to the SRP and not to Harvard Law School or Harvard University. The work of the SRP has been discussed in other posts on the Forum available here.

In its 2012 Annual Report released today, and in joint press releases issued today with institutional investors it represents, the Shareholder Rights Project (SRP) provided detailed information about the outcomes of its work with SRP-represented investors during 2012, the SRP’s first full year of operations.

As discussed below, major results obtained during 2012 include the following (for complete details on all outcomes see the Annual Report):

  • 48 S&P 500 companies (listed here) entering into agreements to move toward declassification;
  • 38 successful precatory proposals (listed here), with average support of 82% of votes cast;
  • Over 60% of successful precatory proposals by public pension funds and over 30% of all successful precatory proposals; and
  • 42 board declassifications (listed here), reducing the number of classified boards among S&P 500 companies by one-third.

Expected Impact by End of 2013: As a result of these outcomes and the ongoing work of the SRP and SRP-represented investors, it is estimated that a majority of the 126 S&P 500 companies that had classified boards at the beginning of 2012 will have moved toward annual elections by the end of 2013.

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Link:

http://blogs.law.harvard.edu/corpgov/2013/02/13/large-scale-governance-reforms-in-sp-500-companies/

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corporate elections & voting shareholder proposals program news & events institutional investors classified boards illinois state board of investment los angeles county employees retirement association lucian bebchuk nathan cummings foundation north carolina state treasurer ohio public employees retirement system scott hirst shareholder rights project staggered boards precatory proposals florida sba prim school employees retirement system of ohio

Authors:

Lucian Bebchuk, Scott Hirst and June Rhee, Harvard Law School,

Date tagged:

02/13/2013, 10:48

Date published:

02/13/2013, 08:51