More “Zombie Directors” as Investor Scrutiny Intensifies

The CEOs who poured so much money into pushing back on shareholder proposals and access to independent research may be sorry to discover the focus shift to no votes on directors.

A new report from MSCI reveals that 54 directors on the boards of 32 companies in the MSCI USA investable market index (2,313 companies) failed to receive majority support in 2020, a figure 35% higher than in 2016, the report states…The most common drivers identified for failing to reach majority support included a lack of gender diversity on the director’s board, ongoing poor pay practices at the company and insufficient meeting attendance by the director…[W]hile Glass Lewis didn’t see an increase in the number of failed directors, the number of directors who saw vote support in the range of 91% to 100% dropped from 16,642 in 2019 to 15,907 this year. During the same period, the number of directors one tier below — those who received vote support of 81% to 90% — increased from 1,772 to 2,136. MSCI flagged 2,300 U.S. companies that had at least one director who didn’t receive vote support of 90% or higher.

Agenda – Zombies Rise as Investor Scrutiny Intensifies

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