Newsletter: Proxy Advisors on Majority-Supported Shareholder Proposals (Jan. 2013)

‘Tis the season of shareholder proposal filings, but the new year may bring additional anxieties for issuers. Proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis have announced in their 2013 policy changes that they are raising the bar on board responsiveness to shareholder resolutions that receive significant support. The potential impact on boards, in the form of future withhold recommendations, could be significant if they fail to respond in the manner outlined by the proxy advisory firms. This article examines the contours of the policy changes and how issuers can prepare for them.