Conference Board Offers FactSet Data

The Shareholder Activist - Conference Board Offers FactSet DataThe Conference Board and FactSet Research Systems announced a joint initiative to analyze and disseminate aggregate data from the annual general meetings (AGMs) of U.S. public companies.

The Conference Board, in collaboration with FactSet, will produce The Proxy Voting Report — an annual publication in which voting results and other information on proxy contests, proposal volume, proposal topics, and sponsorship types will be aggregated based on company size and 20 business industry groups. The annual publication will be supplemented by The Proxy Voting Fact Sheets, a bi-monthly review of the major highlights from recently held AGMs.

A working paper titled Shareholder Proposals: Trends from Recent Proxy Seasons (2007-2011) exemplifies the sort of aggregate data that will form the basis of the periodic research. The paper was co-authored by Matteo Tonello, managing director of Corporate Leadership at The Conference Board and research associate Melissa Aguilar.

The exclusive research source for these publications will be FactSet’s online proxy-voting database, which encompasses more than 43,000 corporate documents, including: charters, bylaws, and other organizational documents; daily updates on filed shareholder and management proposals; and detailed defense profiles for more than 5,600 U.S.-incorporated companies. (see my previous post SharkRepellent: Research Lessons for Shareowner Activists) Under the agreement with FactSet, The Conference Board is also licensed to offer to its member companies and other business corporations full access to FactSet SharkRepellent and FactSet SharkWatch. Tonello praised the agreement:

In the last decade, The Conference Board has been recognized by regulators, government experts, and academics for its effort to objectively document evolving corporate governance practices. We are proud to join forces with FactSet, a leading provider of data on AGMs and proxy voting, to consolidate a wealth of information in a resource that we believe will be of great value to corporate secretaries, general counsel, and corporate governance officers preparing for the meeting season.

John Laide, Vice President, FactSet Research Systems, added:

We are excited to work with The Conference Board to provide proxy voting research to corporations. Our comprehensive coverage of shareholder meetings, voting trends, and precedents, coupled with the insight and thoughtful analysis of The Conference Board, will benefit member companies immensely, especially in what is expected to be an eventful and challenging upcoming proxy season.

Here are a few items that struck me from the Trends report:

The historical analysis by topic of filed shareholder proposals on corporate governance (Chart 24) shows the resurgence in the relative number of proposals to change the director election method from plurality to majority voting (13.2 percent of the total number of proposals submitted on corporate governance in 2011, up from 9.4 percent in 2010, which in turn had represented a significant decline from the 16.3 percent level reported in 2007). Other corporate governance topics to gain momentum in 2011 were board declassification (16.3 percent, up from 13.8 percent in 2010) and the ease of requirements to act by written consent (11.7 percent, up from 7.3 percent in 2010), while shareholder proposals seeking to allow cumulative voting almost doubled in volume (measured as a percentage of the total) since the prior year (8.3 percent, up from 4.8 percent in 2010). However, the percent of proposals to separate the CEO and board chairman was halved (7.7 percent, from 14.5 percent of 2010)…

As shown in Table 10, the corporate governance proposal topics that, in 2011, obtained the highest levels of for votes as a percentage of votes cast were the requests to declassify the board of directors (which won majority support with a record average 73 percent of for votes, up more than 13 percentage points from 2010), the requests for a shareholder vote on poison pills (67.2 percent) and the elimination of supermajority requirements (58.5 percent). The change from plurality to majority voting was confirmed in the 2011 proxy season as another shareholder favorite, winning the average support of 57.9 percent of votes cast.

Looking at the statistics for last year, individuals filed 42% of the shareowner proposals, labor unions 17% and public pension funds 11%. Although I filed twice as many proposals as CalPERS last year (6 vs 3), that was only 1/9 the number filed by John Chevedden (55). Public pension funds had a 41% success rate, whereas individuals only won 34% of the time. I could spend far too much of my time reviewing all the tables. If you are interested in who is submitting what kind of proposal and which get the most support, this is a great source. Hat tip to the Conference Board and FactSet Research Systems. Disclosure: I recently added FactSet Research Systems Inc. (FDS) to my portfolio.

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Posted in Featured, Shareholder Policies & Investor Regulations, Shareholder Proposals | 1 Comment

One Response to Conference Board Offers FactSet Data

  1. Christopher Bayer, Ph.D. says:

    “A Huge Step in the Right Direction”

    The Conference Board and FactSet Research Systems initiatives are major steps in the right direction. It’s all about transparency, data, and self- monitoring behavior modification systems (SM-BMod). These techniques are interesting in that they “put all the data” out there which enables empowerment. The data are not to be feared, but rather utilized to create better, smarter, methods of running companies. Clarity and more effective corporate governance can then evolve and triumph.

    We have to know what we are doing so that we can do it better. Denial, avoidance, rationalization, deception et al are not good management methods. The Conference Board and FactSet Research Systems are excellent sources which fuel transparency and clear thinking. Simply put, one must know “what’s what” in order to make intelligent, effective, and righteous decisions.

    Keep in mind that the term “research” is derived from the Middle French “rechercher” which means “to go about seeking.” In essence, research is creative work which is undertaken to increase our knowledge bases. It is a systematic and disciplined endeavor which leads to discovery, innovation, and explanation. It is also an adventure. Research resolves mysteries. Over the past 15 years, the field of corporate governance has soared. As a result, stewardship is taken more seriously, and risk is managed more effectively. Research needs to be embraced, not feared. SM-BMod systems make our companies better. Data are allies. Being in the dark creates error and poor governance. It all comes out in the wash regardless. Research empowers. Self-monitoring and data collection puts management and shareholder alike in charge of our company’s destiny.