The support by the world’s largest fund for a shareholder resolution calling for annual election of all directors filed by an individual is a development of enormous significance, especially since it was announced ahead of the vote to nudge other investors to support it as well. This is especially important right now because, as the proponent of this resolution, Jim McRitchie, points out, corporate funded firms like the Spectrem Group complain that a large number of shareholder proposals are submitted by a small group of individual investors with modest holdings. This already-well documented data is not new or relevant. The only meaningful factor is the level of support for these resolutions from large, sophisticated financial institutions which may not be willing to file shareholder proposals but are committed as fiduciaries to supporting them. We note that Spectrem, whose echo of “Main Street” in the title of their report suggests a likely connection to the dark money fake front group Main Street Investors Coalition, purports to be speaking on behalf of individual investors in calling for “reform,” but the paper is authored by a law school professor whose program is funded by the Kochs, reportedly also backers of the Main Street Investors Coalition.
Paul Hodgson writes on Responsible Investor:
In what is perhaps a first, Norges Bank Investment Management, the manager of the huge Norwegian Government Pension Fund Global, has aligned itself with “gadfly” investor James McRitchie. McRitchie – publisher of the corpgov.net website – is one of a group of private investors who target US companies with corporate governance resolutions. Sometimes dubbed the ‘Chevedden Group’ after one of their number, John Chevedden, other members of the group include McRitchie’s wife Myra Young and Kenneth Steiner.
RI reported late last year that the group was increasingly looking at environmental and social (E&S) shareholder proposals.Now McRitchie, writing on corpgov.net, describes his “good governance proposal” at cornflake giant Kellogg calling for board declassification (i.e. removing staggered voting). On Wednesday, Norges Bank announced its intention of supporting this resolution, the first voting pre-disclosure it has made this year.
In announcing NBIM’s voting intention, Chief Corporate Governance Officer Carine Smith Ihenacho said: “The board represents the company’s shareholders. For board accountability to be effective, shareholders must be able to participate in frequent election of all members of the board, with our preference being annual elections.”
With this level of predicted support and the company’s lack of opposition, it seems likely that the proposal – though non-binding – will receive a majority of votes in support.