Proxy Update – State Street Global Advisors – Voting Guidelines

Firmly Focused on the Long-Term

 In late February, 2016, Ronald P. O’Hanley, President and CEO of State Street Global Advisors released a letter and guidelines for “Effective Independent Board Leadership”.  In his letter Mr. O’Hanley stresses the importance of long-term value creation and the perils of companies focusing on short-term results.  Mr. O’Hanley states that “long-term value creation can happen only when companies have in place effective, independent board leadership.”

Mr. O’Hanley also emphasizes that SSGA’s preferred approach to drive greater board independence is through engagement and active dialog with companies and board leadership.  SSGA believes that as one of the largest passive managers in the world, they have a responsibility to engage with companies on the issue of board independence to ensure long-term focus.

Also of note, SSGA believes board recruitment and refreshment is even more critical when focusing on the long-term.  SSGA does not agree with a one-size-fits-all approach to governance and, as an example, has supported a combined Chair and CEO at companies with whom they have had active engagement and determined that there is effective independent leadership with a combined CEO and chair along with an engaged lead director.

SSGA’s letter and guidelines continue a trend among passive funds (such as Blackrock) to encourage a focus on the long-term and not on quarterly earnings and short-term successes.

A copy of the letter and guidelines can be found here.

We would be pleased to discuss this important topic with you.  Please contact your Morrow & Co. representative to set up a call.

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