Shaping US practice through shareholder resolutions

Stewardship Principles Shaping US practice through allianzgi.com shareholder resolutions November 2022 Record numbers of shareholder resolutions in 2022 have once again demonstrated their important role in the shaping of sustainability and governance practices in the US. Allianz Global Investors recognises its role in the development by having a strong – and regularly evolving – voting policy aligned with themes it deems important. David Shammai The role of shareholder resolutions Senior Stewardship Institutional investors help drive changes Key takeaways Analyst in practice – The use of shareholder proposals In the US, shareholder resolutions have played in the US is growing – and AllianzGI a significant role in shaping corporate practice is strengthening the link between around governance and sustainability matters. the themes it deems important and Most resolutions are filed by smaller shareholders, engagement and research activity. often non-governmental organisations and – But voting on shareholder resolutions 1 individuals , yet require broader shareholder alone should not define the boundary support. Therefore, institutional investors hold of stewardship reach and, on some an influential role and responsibility – and occasions, AllianzGI sought to extend its AllianzGI has a strong track record for voting on message via director elections. shareholder resolutions. – For 2023, AllianzGI will continue to An example is the current high prevalence of monitor emerging themes to inform proxy access2, which is available in some form at its voting, while strengthening the link over two-thirds of S&P 500 companies. Although between voting, engagement, and the number of resolutions filed requesting the sustainability research. adoption of proxy access fell from 51 in 2016 to 9 last year (and 8 year-to-date), the successful promotion of this topic has meant proxy access run of shareholder resolutions last year. While has become mainstream practice. Any resolutions the number of these resolutions fell from 17 now tend to focus on amendments instead last year to only 7 this year, the proportion of adoptions. of companies releasing their EEO-1 report3 Something similar has happened on resolutions rose from 4% in September 2020 to 11% in for diversity reporting following a successful September 2021.4 We believe these figures 1. Source: Nili Y. and Kastiel K., The Giant Shadow of Corporate Gadflies, 94 Southern California Law Review 569 (2021) Univ. of Wisconsin Legal Studies Research Paper No. 1523. 2. The ability of a group of long-term shareholders to nominate board candidates. 3. Federally mandated annual report, requiring companies with at least 100 employees to provide information on gender, race and ethnicity by job categories. 4. Source: Figures published by www.justcapital.com Value. Shared.