RiskMetrics Issues Policy Updates for 2010 Proxy Season

by Holly Gregory, for The Harvard Law School Forum at Harvard Law School, December 15, 2009.

On November 19, 2009, RiskMetrics Group issued updates to its proxy voting policy that will be applicable to shareholder meetings held on or after February 1, 2010. The policy updates that are applicable to US companies are available at here. This briefing summarizes those policy updates that affect US companies and discusses implications for voting recommendations and results in uncontested elections of directors. [1] Notably, RiskMetrics’ updated policy expands the circumstances that will lead it to recommend that its clients vote against or withhold votes for directors who are up for re-election in 2010. As outlined in Appendix A, there will now be more than 40 categories of practices that could lead to a negative vote recommendation.

RiskMetrics voting recommendations are influential: The voting results at Russell 3000 companies for the 2009 proxy season indicate that the vast majority of directors who received a majority “against” or “withhold” vote also received an adverse RiskMetrics vote recommendation. The impact of negative vote recommendations is likely to be even greater for the 2010 proxy season because of the increase in companies adopting majority voting for the election of directors and/or director resignation policies, coupled with the elimination of brokers’ ability to vote in director elections in the absence of customer instructions…(continue reading)


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