As of Jan. 1, ISS is tracking almost 450 governance-related shareholder resolutions for the 2007 proxy season. The issue of majority voting in director elections will again feature prominently, based on the number of proposals filed to date as well as momentum gained from support of such measures in recent years.
However, companies have shown an increased willingness to adopt majority voting bylaws and policies, prompting several union pension funds to withdraw resolutions and actively engage with other issuers to reach agreements. In the past six weeks, more than 25 firms have adopted majority voting or announced plans to do so.
In addition, proxy access--the proposed, tabled, litigated, and much-debated suggestion that shareholders meeting certain requirements be allowed to nominate a limited number of corporate directors--will likely appear on a few proxies this year after the American Federation of State, County, and Municipal Employees (AFSCME) successfully challenged the exclusion of an access proposal.
The topic that dominated last year's proxy season--calls for director elections by majority vote--will likely feature just as prominently in 2007. In 2005 and 2006, activist investors pushed for companies to allow for majority voting after the SEC abandoned a 2003 draft rule designed to give investors greater say over director nominations.
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