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13 March 2024 | Press Release
The 2024 proxy season will likely see a rising number of shareholder proposals going to a vote at annual shareholder meetings, and weakening support for many of those proposals, according to a new report by The Conference Board.
At the same time, major companies and institutional investors are looking to find common ground on shareholder proposals that offer unfamiliar, and sometimes conflicting, approaches to ESG topics.
“There may be a silver lining to the 2024 proxy season, as companies and institutional investors alike navigate ardent pro- and anti-ESG pressures,” said Merel Spierings, author of the report and Senior Researcher at The Conference Board. “If investors and companies can tune out the noise, this proxy season could spark a new era of constructive dialogue that can generate long-term value.”
The Conference Board produced the report with disclosure data from ESGAUGE. It was developed in collaboration with Russell Reynolds Associates and the Rutgers Center for Corporate Law and Governance.
The findings come from shareholder proposals at Russell 3000 companies for (full years) 2022 and 2023, and Chatham House Rule sessions with executives from the investor community representing over 15 trillion dollars in assets under management, as well as with chief legal officers and governance executives.
Additional findings and insights include:
Shareholder Proposals Overall
Data from 2023: 913 shareholder proposals were filed and 71% were voted on, receiving 23% average support. In 2022, 811 proposals were filed and 67% were voted on, receiving 31% average support.
Forecast for the 2024 proxy season
“It is important for companies to recognize that major institutional investors are under pressure from ESG rating agencies that may take a cookie-cutter approach to evaluating asset manager performance. To help investors justify their position when they vote against a proposal, companies can provide information in the proxy statement on the costs, unintended consequences, and limited benefits of implementing the proposal,” said Paul Washington, Executive Director of The Conference Board Governance & Sustainability Center.
Governance
Data from 2023: 251 governance proposals were filed and 83% were voted on, receiving 30% average support. In 2022, 269 proposals were filed and 81% were voted on, receiving 37% average support.
Forecast for the 2024 proxy season
Environment
Data from 2023: 144 proposals were filed and 56% were voted on, receiving 21% average support. In 2022, 142 proposals were filed and 44% were voted on, receiving 35% average support.
Forecast for the 2024 proxy season
Social & Human Capital Management
Data from 2023: 247 social proposals were filed and 68% were voted on, receiving 17% average support. In 2022, 189 social proposals were filed and 71% were voted on, receiving 22% average support.
In 2023, 155 HCM proposals were filed and 61% were voted on, receiving 19% average support. In 2022, 169 HCM proposals were filed and 56% were voted on, receiving 27% average support.
Forecast for the 2024 proxy season