VERIZON COMMUNICATIONS INC. | Independent chair at Verizon Communications Inc.

Status
29.90% votes in favour
AGM date
Previous AGM date
Proposal number
9
Resolution details
Company ticker
VZ
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
Telecom
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. Whenever possible, the Chairman of the Board shall be an Independent Director.
Supporting statement
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.

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

The roles of Chairman and CEO are fundamentally different and should be held by·2 directors, a CEO and a Chairman who is completely independent of the CEO and Verizon. The job of the CEO is to manage the company. The job of the Chairman is to oversee the CEO and management.

A Lead Director is no substitute for an independent Board Chairman. A lead director is not responsible for the strategic direction of the company. And a Chairman/CEO can ignore the advice and feedback from a lead director.

The Verizon lead director has 9 tasks some of which he shares with others. Weak words describe the tasks of the Verizon lead director. There is a “seek to promote” task and an “act as liaison” task. There are 2 “be available” tasks. There is an “approve” task for which the lead director should be involved in the development of what he now only approves after the fact. There is a “may call a meeting” task.

Perhaps there should be a rule against a person who has been a CEO and a Chairman at the same time elsewhere being named as Verizon lead director. Verizon lead director Mr. Clarence Otis had 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 the one Verizon person who now has the 2 most important Verizon jobs, Chairman and CEO. Affinity is inconsistent with the oversight role of a lead director.

Plus Mr. Otis has 17-years of long tenure at Verizon. As director tenure goes up director independence goes down. Independence is the most important attribute in a lead director.

Plus management fails to give shareholders enough information on this topic to make an informed decision in favor of management. There is no management comparison of the exclusive powers of the Office of the Chairman and the de minimis exclusive powers of the Lead Director.

How other organisations have declared their voting intentions

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

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