nCino 2024

nCino 2024 Proxy Votes – Declassify the Board

nCino 2024 Proxy Votes. James McRitchie’s Proposal for the annual election of all directors is one of several items to be voted on before or during the nCino (NCNO) annual meeting on June 20, 2024, at 7:00 a.m. Pacific time. Attend the annual meeting online or in person. I suggest you vote in advance. However, you can also vote during the meeting with your control number IF voting isn’t cut off right after all proposals have been presented.

Vote  FOR #5 Elect Each Director Annually (Declassify the Board of Directors) and other items as indicated below. Note: If you vote online and leave blanks, those blanks will be filled in, not as abstentions, but as if you had voted as the Board recommends. That’s not exactly democratic corporate governance.

I voted with 15% of the Board’s recommendations. You can view the Proxy Statement via the SEC’s EDGAR system (look for DEF 14A) or on LEXexamples or CapEdge, which offer many free tools.

nCino, Inc., a software-as-a-service company, provides cloud-based software applications to financial institutions in the United States and internationally.

The Shareholder CommonsRead Warnings. Good corporate governance generally results in better profits and a better society. However, I don’t prioritize profits over our natural environment and human needs, especially when companies externalize costs. (see The Shareholder Commons) I take a systems approach.

nCino 2024 ISS Rating

nCino, Inc.’s ISS Governance QualityScore as of June 1, 2024 is 8. The pillar scores are Audit: 6; Board: 10; Shareholder Rights: 5; Compensation: 9. That’s not very good. Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.

nCino 2024: How We Voted

ItemEgan-Jones RecommendationCorpGov.net Votes
1A-1C – Election of DirectorsFOR, EXCEPT
(1C) William Ruh
AGAINST ALL
2 – Ratification of the Appointment of Independent AuditorsAGAINSTFOR
3 – Advisory Vote to Approve the Compensation of the Named Executive OfficersFORAGAINST
4 – Amendment of the Company’s Certificate of Incorporation to Provide for the Exculpation of Officers as Permitted By Delaware Law and to Make Certain Conforming Name ChangesFORAGAINST
5 – Shareholder Proposal – Elect Each Director AnnuallyFORFOR

nCino 2024: Considerations and RecommendationsDiligent logo

Diligent has the best tools for looking up voting records and bylaw characteristics, determining how vulnerable companies are on what issues, deciding what proposals might be most productive, etc. I was helped with my voting advice from Egan-Jones and my proxy voting policy through iconikapp. Some funds announced their votes in advance. I voted all items the same as the NYC Comptroller.

Egan-Jones

Free Proxy Advisor From As You Sow & IconikappSign up for the iconik/AYS app to automate voting for all your proxies according to human values. In about two minutes, you’ll vote for all your proxies according to values that balance environment, social, governance, and profitability. More information is available at Free Proxy Advisor From As You Sow & Iconikapp. I have a more customized version, so your results with iconikapp.com may differ. I am also beginning to look more at the coverage provided by Free Float Analytics. Free Float AnalyticsIconikapp

nCino 2024: Directors

I voted Against the limited number of board members up for election. Since I am rushed for time, I won’t explain much. I went with the NYC Comptroller. However, I will note that Pierre Naudé is both the CEO and Chairman of the Board. That’s a conflict of interest. Ruh has been there for more than 10 years, so Egan-Jones thinks he has probably lost his independence.

Free Float characterizes the board type as “Totalitarian,” maybe because Naudé exercises an estimated 76% of the influence. Only one woman is on the Board; Pam Kilday holds only 4% of the power. As Norges notes, “Diversity contributes to the overall effectiveness of the board and is a sign of an effective nomination process. The board should ensure that it can bring a broad range of perspectives and approaches to its decision-making process. The board should have an appropriate balance of competencies and backgrounds.”

The company has vastly underperformed the Nasdaq over the last 5 years. While the Nasdaq went up 70%, nCino went down 58%. Change is needed.

nCino 2024: Board Items #2-4

Vote For the Auditor. Egan-Jones notes that, over time, many are essentially captured. They are troubled when a company contracts with the same firm for over seven years. nCino’s auditor has been Ernst & Young LLP for 8 years. I will cut them more slack than that.

I voted along with the NYC Comptroller AGAINST the pay package for named executive officers. Why reward them for poor performance? I also joined with them in voting against the Exculpation of Officers.  Exculpation allows officers to make business decisions without fear of personal monetary liability for a breach of the duty of care. I don’t want to let them off the hook for breaching their duty of care.

nCino 2024: Item #5 Declassify the Board of Directors

James McRitchie, the publisher of CorpGov.net, submitted this Proposal. When we presented a proposal to shareholders in 2022 to move to a majority vote standard for directors, 98.8% supported it. Ninety percent of the S&P 500 have a declassified board so that shareholders can evaluate directors yearly, promoting good governance through accountability.

This proposal is simple: let’s elect all our directors every year. The opposition claims that three-year terms help attract top-notch directors, but that’s ridiculous. Almost 90% of S&P 500 and Fortune 500 companies have already made this change and still manage to get great directors. Who wouldn’t be willing to stand for election every year?

Apparently, our directors are scared, since they oppose this proposal. In 2022, my proposal for directors to be elected by majority vote when unopposed got 99% support, even though the Board didn’t endorse the measure. After the vote, it was quickly adopted.

Annual elections are a best practice. Most investors and proxy advisors agree that they make directors more accountable, which improves performance and boosts company value.

Shareholder resolutions on this topic usually win by large margins at companies without a dominant shareholder. Big funds like BlackRock, Vanguard, and State Street support declassifying boards.

Here’s something to think about: As I stated above, while the Nasdaq went up 70%, nCino went down 58%.

Studies show that classified boards can hurt a company’s value by making directors less effective and management more entrenched. Declassified boards are linked to higher returns.

Market reactions to board declassification announcements are usually positive. Investors like the increased accountability and potential for better performance.

A rising or stable share price, or at least one that doesn’t tank compared to the Nasdaq, is a much better way to attract top-notch board members than promising them three-year terms.

Let’s make our directors more accountable to shareholders. Vote FOR proposal #5.

nCino 2025: Mark Your Calendar

Any stockholder or other interested party who wishes to communicate with our board of directors or any individual director may send written communications to our board of directors or such director c/o Corporate Secretary, nCino, Inc., 6770 Parker Farm Drive, Wilmington, NC 28405, or via email to corporatesecretary@ncino.com. The communication must include the stockholder’s name, address and an indication that the person is our stockholder. The Corporate Secretary will review any communications received from stockholders and will forward such communications to the appropriate director or directors, or committee of our board of directors, based on the subject matter.

Under Rule 14a-8 under the Securities Exchange Act of 1934 (the “Exchange Act”), if you want us to include a proposal in the proxy materials for our 2025 annual meeting of stockholders, we must receive the proposal at our executive offices at 6770 Parker Farm Drive, Wilmington, North Carolina 28405, no later than January 10, 2025.

   

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