Board Structure
- What proportion of non-executive directors has been on the board less than six years?
- Does the board have any mechanisms to encourage director refreshment? (For informational purposes only)
- Does the company disclose the existence of a formal CEO and key executive officer succession plan?
- What is the proportion of women on the board?
- Has the board adequately responded to low support for a management proposal?
Shareholder Rights and Takeover Defenses
- Does the company have an exclusive forum provision?
- Does the company have a fee shifting provision?
- Does the company have a representative claim limitation or other significant litigation rights limitations?
- What is the ownership threshold for proxy access?
- What is the ownership duration threshold for proxy access?
- What is the cap on shareholder nominees to fill board seats from proxy access?
- What is the aggregation limit on shareholders to form a nominating group for proxy access?
- Can the board materially modify the company’s capital structure without shareholder approval?
Compensation
- Does the company employ at least one metric that compares its performance to a benchmark or peer group (relative performance)?
Audit and Risk Oversight
- What is the tenure of the external auditor? (For informational purposes only)
Updated governance factors for US companies include:
- in the Board Structure category, whether the board recently took action that materially reduces shareholder rights was expanded to cover other governance failures (with excessive pledging of shares and failure to opt out of state laws requiring a classified board identified as common types of governance failures);
- in the Shareholder Rights and Takeover Defenses category, whether all directors are elected annually was expanded to consider whether the company could classify the board without shareholder approval, even if the board is not currently classified; and
- in the Shareholder Rights and Takeover Defenses category, whether a supermajority vote is required to approve amendments to the charter or bylaws was expanded to consider whether shareholders have the right to amend the bylaws.
