SOUTHERN COPPER CORPORATION | Independent Board Chair at SOUTHERN COPPER CORPORATION

Status
Withdrawn
AGM date
Resolution details
Company ticker
SCCO
Lead filer
Service Employees International Union (SEIU)
Resolution ask
Amend board structure
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Materials
Company HQ country
United States
Resolved clause
Service Employees International Union has filed the following resolution. This will be updated in the lead filer field as soon as possible.

Shareholders of Southern Copper Corporation (the “Company”) urge the Board of Directors (the “Board”) to take the steps necessary to adopt a policy to require that the Chair of the Board (the “Chair”), whenever possible, be an independent member of the Board. This independence policy shall apply prospectively so as not to violate any contractual obligations. The policy should also specify the process for selecting a new independent Chair if the current Chair ceases to be independent between annual meetings of shareholders. Compliance with the policy may be excused if no independent director is available and willing to be Chair.
Supporting statement
In our view, the Chair should be an independent director, who has not previously served as an executive of the Company, in order to provide robust oversight and accountability of management and to facilitate effective deliberation of corporate strategy. The appointment of an independent board chair has become a more common practice in recent years. In 2019, 34 percent of S&P 500 boards were chaired by an independent director, compared to 16 percent in 2009.1
The Company’s Chair German Larrea Mota-Velasco is a non-independent member of the Board. Grupo Mexico S.A.B. de C.V. (“Grupo Mexico”) beneficially owns more than 50 percent of the Company’s voting stock. German Larrea Mota-Velasco serves as President and CEO of Grupo Mexico. German Larrea Mota-Velasco also serves as non-independent member of the Board’s Compensation and Corporate Governance committees. He previously served as the Company’s CEO until 2004.
In our opinion, an independent Chair will increase investor confidence in our Company and support enhanced oversight of the Company’s executive officers. The Board is responsible for monitoring the executive officers’ performance and providing objective guidance to the executives. Having a non-independent Chair has the potential to weaken the Board’s independent oversight. We also believe that an independent Chair will enhance the independence and objectivity of the Board in reviewing the Company’s various related party transactions with Grupo Mexico.
According to Institutional Shareholder Services, “boards with independent leadership (either via an independent Chair or a Lead Director) are more likely to be more diverse, have more balance tenure, are more responsive to shareholders, while their CEO pay levels are less likely to be excessive relative to peers.”2 According to Glass Lewis, “shareholders are better served when the board is led by an independent chairman who we believe is better able to oversee the executives of the Company and set a pro-shareholder agenda without management conflicts that exist when the CEO or other executive also serves as a chairman.”3
For these reasons, we urge shareholders to vote FOR this resolution.

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