Wed. Dec 6th, 2023
    New Trends in Corporate Proxy Season: Changing Investor Priorities

    The corporate proxy season has seen a significant shift in investor priorities, according to a report by Diligent. One surprising finding is the diminishing support for environmental and social (E&S) shareholder proposals by the “Big 3” investors: BlackRock, Vanguard, and State Street.

    In the United States, BlackRock’s support for E&S proposals dropped from 41.3% in the 2020-21 season to 23.7% in 2021-22, and finally to a mere 8.7% in 2022-23. Vanguard and State Street experienced similar declines in their support for E&S proposals. This signals a clear backlash against these initiatives.

    On the other hand, when it comes to governance (G), all three firms remained steadfast in their support for “say on pay” advisory votes, with voting percentages consistently above 90%. While E&S issues face a decline in investor support, corporate governance still holds strong appeal for the “Big 3” investors.

    The report by Diligent suggests that the relationship between companies and their shareholders has returned to normalcy after a tumultuous period marked by the rise of ESG funds, a pandemic, the 2020 U.S. election, and social movements promoting diversity, equity, and inclusion.

    However, not everyone sees this “return to normal” as a positive development. According to a report from the Fortune CEO Initiative, written by Anton Vincent, president of Mars North America, and Cid Wilson, CEO of the Hispanic Association on Corporate Responsibility, there is a need to resist the backlash against ESG efforts.

    In an interview with Xerox CEO Steve Bandrowczak, he outlined his plan to reinvent the 117-year-old company. Bandrowczak believes that Xerox can leverage its existing relationships in providing document services to small- and mid-size companies to expand into the realm of Robotic Process Automation (RPA) and AI services. By partnering with larger companies that lack access to these clients, Xerox aims to drive growth in this emerging field.

    Bandrowczak highlighted a positive trend in Xerox’s contract renewals for Managed Print Services, which have shown an increase in the last three quarters. This upward trend can be attributed to the addition of new products and services that complement the company’s core offerings.

    While the path to reinvention is challenging, it begins with a well-defined plan. Xerox’s strategy to embrace emerging technologies and build fruitful partnerships demonstrates its commitment to evolving in a rapidly changing business landscape.

    FAQs

    1. What are the “Big 3” investors?
    The “Big 3” investors refer to BlackRock, Vanguard, and State Street, which are among the largest asset management companies in the world.

    2. What is Robotic Process Automation (RPA)?
    Robotic Process Automation (RPA) is a technology that automates repetitive tasks and processes using software robots. It aims to improve operational efficiency and reduce human error.

    3. What is the Fortune CEO Initiative?
    The Fortune CEO Initiative is a platform that brings together CEOs from various companies to address key issues and challenges in business and society. It promotes collaboration and innovation in corporate leadership.

    4. What is Diligent?
    Diligent is a company that provides governance, risk, and compliance solutions for modern boards and leaders. Their report on the corporate proxy season offers insights into investor behavior and trends.