Abbott Laboratories | Independent board chairman at Abbott Laboratories

Status
30.57% votes in favour
AGM date
Previous AGM date
Proposal number
6
Resolution details
Company ticker
ABT
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
United States
Resolved clause
Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO.
Supporting statement
"Whenever possible, the Chairman of the Board shall be an Independent Director.

The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board on an expedited basis.

Although it is best practice to adopt this proposal soon this policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition.

This proposal topic won 52% support at Boeing and 54% support at Baxter International in 2020. Boeing then adopted this proposal topic.

This proposal topic won 33%-support at our 2021 annual meeting. This 33%-support likely represented 40+%-support form the shares that have access to independent proxy voting advice.

Abbott Laboratories is Exhibit A in why the Lead Director role is a poor alternative to an independent Board Chairman.

Our Lead Director, Mr. William Osborn violates the most important attribute of a Lead Director - independence. As director tenure goes up director independence goes down. Mr. Osborn has 15-years Abbott Laboratories director tenure. Mr. Osborn’s long tenure makes him a prime candidate to retire especially since he is age 75. Mr. Osborn also received the second highest number of against votes for an Abbott Laboratories director in 2022. It is time for a change given that our stock was at $140 in December 2021.

Perhaps there should be a rule against a person who has been a CEO and a Chairman being named as Lead Director. Mr. Osborn had 12-years in the dual jobs of CEO and Chairman. Past and present holders of both jobs at the same time would seem to have a special affinity with each other which is inconsistent with the oversight role of a Lead Director.

With the current CEO serving as Chair this means giving up a substantial check and balance safeguard that can only occur with an independent Board Chairman.

A lead director is no substitute for an independent board chairman. A lead director cannot call a special shareholder meeting and cannot even call a special meeting of the board. A lead director can delegate most of his lead director duties to the CEO office and then simply rubber-stamp it. There is no way shareholders can be sure of what goes on."

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Rothschild & co Asset Management For

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