What’s New for the 2019 Proxy Season: Momentum Grows for Proxy Voting Reform and Sustainability Disclosure

Over the past few weeks, some notable developments in the turbulent, complex world of proxy voting and shareholder activism have set the stage for a public SEC roundtable on proxy voting issues scheduled for November 15, 2018. As we explain in this Alert, the SEC appears poised at the threshold of a potentially significant re-examination of its historical “hands-off” regulatory approach to the activities of proxy advisory firms, as part of a broader “proxy plumbing” initiative that could presage the revival of the agency’s controversial 2016 proposal to permit the use of universal proxies in corporate election contests. In the meantime, proxy adviser Glass Lewis announced that it plans to incorporate SASB’s voluntary sustainability disclosure standards into its proxy voting products in time for the 2019 proxy season. Although Glass Lewis has provided little or no details on implementation, the firm’s announcement provides an opportune moment to assess the non-governmental forces now in play that have prompted a growing number of large U.S. companies to experiment with the release of sustainability reports and other disclosures – in most cases outside the four corners of SEC-filed documents – in response to demand from investors, customers and other corporate stakeholders.

View the alert.