Updated Glass Lewis voting guidelines for 2022 AGM season

Glass Lewis has published its 2022 Policy Guidelines and 2022 Environmental, Social and Governance Initiatives Policy Guidelines. The documents set out its views on current market best practice and its voting recommendations for AGMs in 2022.

Key updates to the Glass Lewis Guidelines for 2022 include:

• Board diversity – In line with the recommendation of the Parker Review (see our blog post here), Glass Lewis will generally recommend against the re-election of the nomination committee chair of any FTSE 100 board that has failed to appoint at least one director from a minority ethnic group and failed to provide a clear and persuasive explanation as to why this is the case. Glass Lewis’s recommendations on gender diversity continue to apply (see our blog post here).
• Executive remuneration – It may recommend that shareholders vote against the re-election of the remuneration committee chair where there are substantial concerns with the remuneration policy and/or pay practices outlined in the directors’ remuneration report. The Guidelines include substantive amendments to the sections on remuneration reporting, incentive plan formats and linking executive pay to environmental and social criteria.
• Committee chairs – Where the guidelines would indicate a recommendation to vote against a committee chair, but that chair is not up for re-election, it may instead recommend that shareholders vote against the re-election of one or more long serving committee members.
• Approach to ‘Say on Climate’ votes – Glass Lewis will generally oppose shareholder proposals requesting that companies adopt a Say on Climate vote, on the basis that a company’s business strategy is best determined by the board. However, where management is asking shareholders to vote on a climate transition plan or similar, it will evaluate such resolutions and plans on a case by case basis.
• Disclosure of environmental and social risks – It will generally recommend that shareholders vote against the re-election of the governance committee chair (or the chair or senior independent director) for FTSE 100 companies that fail to include disclosures on the board’s role in overseeing material environmental and social risks in the annual report.