As reported by the Wall Street Journal (Apple Offers Proxy Access) and the Financial Times (Campaigners hail Apple shareholder move), Apple adopts proxy access. Yes, that’s progress, but we shouldn’t be gushing in praise over proxy access lite.
Scott Stringer, New York City comptroller, called the Apple decision a
tipping point… Corporate resistance to proxy access is crumbling as more and more boards are coming to the table and working with investors to provide greater accountability that will drive long-term value.
Patrick McGurn, of ISS, said “companies like Apple tend to be bellwethers and other boards are likely to look to such respected companies and are likely to examine this issue now.”
When other companies do examine the issue of proxy access, I hope they will be able to see a more robust example at Apple. At the upcoming annual meeting, Apple shareholders will get a chance to vote for REAL proxy access to supersede proxy access lite. Apple’s new bylaws allow shareholders to nominate up to 20% of the board, rounding down… so that’s one. My proposal allows up to 25% or 2 directors, whichever is more… so 2 of 8. One director might not even be able to start a conversation because it takes a second on the board to consider a motion.
Additionally, Apple’s proxy access lite limits groups forming a nominating group to 20 members. As the world’s largest company, it may take double that number or more to get to the required 3% held for 3 years. Funds like Vanguard and Fidelity spend very little on governance, so aren’t ever likely to lead the way in invoking proxy access.
As experts point out, Apple is more important as an example for other companies, rather than as a prime candidate itself. That’s all the more reason to enact a more robust proxy access, such as that adopted by the SEC but overturned by management interests through the court. Shareholders should vote for real proxy access at Apple. The world’s largest company should set an example by maintaining the highest standards of corporate governance in the world… at least complying with CII’s Best Practices. Hopefully, we will soon see Apple Adopts Proxy Access… for real!