Corporate governance – Glass Lewis 2025 Policy Guidelines

Glass Lewis has published its 2025 UK Benchmark Policy Guidelines, which set out the proxy advisor’s views on current market practice and its voting recommendations for AGMs in 2025.

The key updates in the guidelines highlighted by Glass Lewis include:

• Director tenure – Where the chair of the board has been in position for more than nine years and no timeline for succession has been provided, Glass Lewis will consider the rationale provided on a case-by-case basis, rather than applying a blanket recommendation against the chair of Nomination Committee (NomCom), which was its previous approach;
• Board diversity – If a clear and compelling explanation is not provided, Glass Lewis will recommend voting against the re-election of the NomCom chair where any main market board has not appointed at least two non-male directors or where any FTSE 250 company has not appointed at least one director from an ethnic minority background;
• Pension contributions – Glass Lewis will generally recommend voting against a remuneration proposal under which executive pension contribution rates exceed those for the majority of the workforce;
• Hybrid incentive plans – The guidelines now include a section setting out Glass Lewis’s assessment of the use of hybrid incentive plans (under which executives receive a combination of performance shares and service-based shares). If such a plan is proposed, companies should explain why this structure is preferred to a single structure, provide a reduction in the maximum opportunity compared to the previous LTIP (and explain the methodology used to decide the reduction rate) and provide a total vesting and post-vesting holding period of at least five years; and
• Oversight of AI – The guidelines set out Glass Lewis’ expectations in relation to oversight and management by the board of AI technologies and when it may recommend voting against the re-election of accountable directors.

The guidelines also clarify Glass Lewis’s policies in a number of areas including conflicts of interest, proxy voting results and other remuneration issues.

Glass Lewis maintains separate Policy Guidelines on Shareholder Proposals and ESG-Related Issues and has published the 2025 update for these guidelines as well. The guidelines are jurisdictionally agnostic and pull together themes for dealing with shareholder proposals and engagement.

The revised guidelines apply from January 2025.