Friday, February 08, 2008
Vote Your Proxy?
The Forum of Executive Women (Philadelphia) recommended in a press release February 11, 2008 that more women should use the proxy vote process as a vehicle to get more women named to public company boards of directors. This is not a new strategy, just one that is slightly different from prior strategies that women advocates have put forward “to get invited to the boardroom ball.”
Is it an effective strategy to “write ‘Where Are The Women?’ on a proxy ballot?” Probably NOT, since the drones who receive the proxy ballots are interested only in the vote, not the editorialization. The second recommendation was “write to significant directors/management (i.e., Non-management directors or lead director, Chair of the board, Chair of the governance/nominating committee, or Corporate Secretary).” While this might get a little more attention, it most likely will generate a response that says: “Thank you for your input, dear.” The third recommendation, “Attend the annual shareholder meeting and ask why there are no or so few women on the board,” may generate a similar response as above.
But what if this is the answer she receives back: “As a shareholder, you have the right to submit nominations to the Nominating or Governance Committee as specified in the proxy documents. If you have one or more serious candidates, you should use the channels made available to all shareholders.”
The reality is that by the time the proxy ballot has been published, all the decisions about corporate director nominees already have been made and your yea vote is the primary goal and objective of the process. In order to increase the number of women directors, smart women investors know they must start back much earlier in the process to have any impact at all.
Do you know what that company’s director nomination process looks like? It’s written in just about every Proxy Statement every published.
Do you know where to find proxy documentation? The documents and procedures are online at the SEC and at the company’s Investor Relations links.
Do you have a qualified candidate?
Have you availed yourself of the multiple channels of recommendation of a candidate?
Does your candidate fit the current priority director needs of the corporation?
Is your candidate suitably educated, trained, and prepared to commit to service on the board?
Is your candidate the best representative of all or a significant share of the shareholder interests?
Are you and your candidate willing to provide all of the documentation required by the nomination process?
Too many women believe they can simply “short-cut” the process because (1) they don’t know a process exists, (2) they don’t have confidence the process is open and fair or (3) they want an easier way into the boardroom. It’s not going to happen. So, women need to figure out the system and make it work for them.
Most companies today are quite open about the channels they use to identify serious director candidates:
“Directors are often are part of the company’s founding stockholders.”
Therefore, as women become more involved in actually creating stock companies, as venture capitalists, they will increase the odds of being included among founding company directors.
“Directors are recommended to the Board by various sources including other directors, the Company’s dealers, stockholders and a third-party executive search firm. In addition to these sources, new director candidates are identified by management or additional third-party executive search firms to assist in identifying and evaluating potential nominees.”
Therefore, as women ensure they are recognized by these various sources (and as more women enter these categories of business themselves), then more women will be referred by these sources.
Too many women simply reject out of hand these options, saying that “it’s all a stacked deck.” That may have been the case 50, 40, 30, 20 or even 10 years ago. But today, as a shareholder or as grouped shareholders, women potentially have the opportunity to participate in the nomination process more than ever before. If women simply reject these options with “sour grapes” arguments, they certainly will not achieve their goals of increasing the number of women directors. And frankly, if women believe it is all a con, why would women want to be a part of it? The reality is that this is serious business -– tough, but open to those women who are willing to learn how to manage it.
A crucial consideration is the matching of (1) the competence for which the board is searching and (2) the competence of the candidate(s).
“Candidates are evaluated in light of the current composition of the Board, the operating requirements of the Company and the long-term interests of the stockholders.”
Very specific experience and selection elements are included in every board review of candidates. Women need to look at more than simply the “diversity” tagline of evaluation criteria: boards need many more skills than simply a match on the chromosome count.
“In performing this evaluation, the Governance Committee considers the diversity, age, skills, experience and other factors it deems appropriate given the needs of the Board and the Company to maintain a balance of knowledge, experience and capabilities. Qualified director nominees should possess high moral character and personal integrity, high level of leadership or managerial experience, experience and knowledge relative to matters affecting the Company, the ability and willingness to contribute to the Board, the ability to exercise sound, independent business judgment, a long-term commitment to the interests of stockholders and growth of the Company, freedom from conflicts of interest, the ability to dedicate sufficient time, energy and attention to Board activities and the diligent performance of his or her duties, and reflect the diversity of the Company’s stockholders, employees, customers and communities.”
Some women argue that Super Woman could not fit this bill. Not true. Competent women are being added to corporate boards every day – more women than ever before in our business history. Frankly, shareholders demand all this competence of all candidates.
Finally, boards will consider director recommendations from stockholders.
“The Board will consider director candidates recommended by the Company’s stockholders. In order to make such a nomination, the stockholder must (i) be a record holder of shares of common stock on the record date, (ii) be entitled to vote for the election of such director(s) and (iii) comply with the notice procedures set forth in the Company’s bylaws. If you would like a copy of the Company’s bylaws, please notify the Company at the address given on the first page of this proxy statement. The bylaws are also available on the Company’s web site under “Investor Relations” at “Corporate Governance.””
It is necessary to meet the timing requirements of the bylaws, include written concurrence from the nominee that she is ready and willing to serve, and shall include “information required pursuant to Regulation 14A under the Securities Exchange Act of 1934.”
Conclusion
If women shareholders truly wish to use their ownership and investment leverage to their full potential, then they will learn how to function in this aspect of the business world. If women just play at the edge of the process, marching and burning proxy voting forms, they will fail in their long term goal of taking their rightful seat in and among our nation’s corporate leadership.
It must be an active, not a passive process. Are women shareholders up to the task? The choice is up to talented women.
Quotations are from Asbury Automotive's 2007 proxy statement and are offered simply as one example.
Is it an effective strategy to “write ‘Where Are The Women?’ on a proxy ballot?” Probably NOT, since the drones who receive the proxy ballots are interested only in the vote, not the editorialization. The second recommendation was “write to significant directors/management (i.e., Non-management directors or lead director, Chair of the board, Chair of the governance/nominating committee, or Corporate Secretary).” While this might get a little more attention, it most likely will generate a response that says: “Thank you for your input, dear.” The third recommendation, “Attend the annual shareholder meeting and ask why there are no or so few women on the board,” may generate a similar response as above.
But what if this is the answer she receives back: “As a shareholder, you have the right to submit nominations to the Nominating or Governance Committee as specified in the proxy documents. If you have one or more serious candidates, you should use the channels made available to all shareholders.”
The reality is that by the time the proxy ballot has been published, all the decisions about corporate director nominees already have been made and your yea vote is the primary goal and objective of the process. In order to increase the number of women directors, smart women investors know they must start back much earlier in the process to have any impact at all.
Too many women believe they can simply “short-cut” the process because (1) they don’t know a process exists, (2) they don’t have confidence the process is open and fair or (3) they want an easier way into the boardroom. It’s not going to happen. So, women need to figure out the system and make it work for them.
Most companies today are quite open about the channels they use to identify serious director candidates:
“Directors are often are part of the company’s founding stockholders.”
Therefore, as women become more involved in actually creating stock companies, as venture capitalists, they will increase the odds of being included among founding company directors.
“Directors are recommended to the Board by various sources including other directors, the Company’s dealers, stockholders and a third-party executive search firm. In addition to these sources, new director candidates are identified by management or additional third-party executive search firms to assist in identifying and evaluating potential nominees.”
Therefore, as women ensure they are recognized by these various sources (and as more women enter these categories of business themselves), then more women will be referred by these sources.
Too many women simply reject out of hand these options, saying that “it’s all a stacked deck.” That may have been the case 50, 40, 30, 20 or even 10 years ago. But today, as a shareholder or as grouped shareholders, women potentially have the opportunity to participate in the nomination process more than ever before. If women simply reject these options with “sour grapes” arguments, they certainly will not achieve their goals of increasing the number of women directors. And frankly, if women believe it is all a con, why would women want to be a part of it? The reality is that this is serious business -– tough, but open to those women who are willing to learn how to manage it.
A crucial consideration is the matching of (1) the competence for which the board is searching and (2) the competence of the candidate(s).
“Candidates are evaluated in light of the current composition of the Board, the operating requirements of the Company and the long-term interests of the stockholders.”
Very specific experience and selection elements are included in every board review of candidates. Women need to look at more than simply the “diversity” tagline of evaluation criteria: boards need many more skills than simply a match on the chromosome count.
“In performing this evaluation, the Governance Committee considers the diversity, age, skills, experience and other factors it deems appropriate given the needs of the Board and the Company to maintain a balance of knowledge, experience and capabilities. Qualified director nominees should possess high moral character and personal integrity, high level of leadership or managerial experience, experience and knowledge relative to matters affecting the Company, the ability and willingness to contribute to the Board, the ability to exercise sound, independent business judgment, a long-term commitment to the interests of stockholders and growth of the Company, freedom from conflicts of interest, the ability to dedicate sufficient time, energy and attention to Board activities and the diligent performance of his or her duties, and reflect the diversity of the Company’s stockholders, employees, customers and communities.”
Some women argue that Super Woman could not fit this bill. Not true. Competent women are being added to corporate boards every day – more women than ever before in our business history. Frankly, shareholders demand all this competence of all candidates.
Finally, boards will consider director recommendations from stockholders.
“The Board will consider director candidates recommended by the Company’s stockholders. In order to make such a nomination, the stockholder must (i) be a record holder of shares of common stock on the record date, (ii) be entitled to vote for the election of such director(s) and (iii) comply with the notice procedures set forth in the Company’s bylaws. If you would like a copy of the Company’s bylaws, please notify the Company at the address given on the first page of this proxy statement. The bylaws are also available on the Company’s web site under “Investor Relations” at “Corporate Governance.””
It is necessary to meet the timing requirements of the bylaws, include written concurrence from the nominee that she is ready and willing to serve, and shall include “information required pursuant to Regulation 14A under the Securities Exchange Act of 1934.”
Conclusion
If women shareholders truly wish to use their ownership and investment leverage to their full potential, then they will learn how to function in this aspect of the business world. If women just play at the edge of the process, marching and burning proxy voting forms, they will fail in their long term goal of taking their rightful seat in and among our nation’s corporate leadership.
It must be an active, not a passive process. Are women shareholders up to the task? The choice is up to talented women.
Quotations are from Asbury Automotive's 2007 proxy statement and are offered simply as one example.
# posted by ChampionBoards.com @ 5:25 PM 
