Financial Times | Opinion Lex
Shareholders are mostly asked to vote on matters of oversight and process, important for the long-term health of the business but not exactly market moving. That’s given rise to a voting ecosystem — involving proxy advisers and governance teams — that focuses on best practice on such topics, rather than the particular investment case of each company. This mostly works fine. But when a genuinely consequential issue does appear on the ballot, it can expose bugs in the corporate governance machine.
One example comes courtesy of BP. Amid tensions on the UK oil major’s pivot from green technologies to oil, proxy adviser firm Glass Lewis has recommended that BP shareholders vote against re-electing chair Albert Manifold at the company’s upcoming AGM on April 23. Top 10 investor Legal & General Investment Management is of the same view, as is UK pension fund body the Local Authority Pension Fund Forum.
The flashpoint here is BP’s decision to exclude a shareholder resolution from Dutch investor group Follow This asking BP to outline how it would protect shareholder value if demand for oil and gas fell.
