Proxy adviser Glass Lewis will proceed to think about boardroom variety when advising methods to vote at U.S. firm annual conferences, however plans to be clearer concerning the counter argument for crucial vote suggestions to assist purchasers keep away from rising political dangers.
The change comes amid a wave of retreat by U.S. companies from their variety, fairness and inclusion (DEI) efforts, underneath risk of authorized motion by U.S. President Donald Trump’s Justice Division.
The choice by Glass Lewis to stay largely dedicated to variety follows a overview of its insurance policies and after proxy advisor rival Institutional Shareholder Providers final month stated it could now not take into account variety when making its boardroom suggestions.
In an e-mail to purchasers seen by Reuters, Glass Lewis stated it’ll stand by its 2025 benchmark tips for U.S. corporations, which embrace that shareholders vote towards sure administrators at among the largest U.S. corporations whose boards lack gender, racial or LGBTQ variety.
However when it recommends votes towards a director in any approach associated to variety, Glass Lewis stated it’ll additionally flag info that would assist an alternate vote by the consumer.
“This strategy permits Glass Lewis to ship the vote suggestions anticipated by purchasers whereas additionally clearly flagging the potential threat that will end result from an AGAINST vote resolution and offering a transparent path ought to some purchasers select to vote FOR the proposal,” the agency stated.
A Glass Lewis spokeswoman stated it additionally will seemingly embrace extra context when making suggestions on diversity-related shareholder proposals.
Glass Lewis and ISS dominate the U.S. marketplace for promoting suggestions about how buyers ought to vote at company conferences on issues akin to boardroom elections or govt pay. Glass Lewis counts some 1,300 purchasers globally together with high pension plans, mutual funds and asset managers with greater than $40 trillion in collective belongings.
Their insurance policies are broadly utilized by buyers together with mutual funds and pension plans which can not have the sources to do due diligence on each firm of their portfolio.
“Actually, we might have most well-liked to not have needed to deliberate over long-standing coverage tips on board variety and DEI shareholder proposals, however the U.S. Administration’s opposition to DEI is compelling corporations, institutional buyers and their proxy advisors to think about adjustments, now or sooner or later,” Glass Lewis’ notice stated.
The transfer echoes steps taken by main asset managers together with BlackRock BLK.N and Vanguard, which confronted stress over their voting selections and in response seemed to offer purchasers extra management.
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