International Paper Company | Shareowner Proposal for Independent Board Chair at International Paper

Status
36.84% votes in favour
AGM date
Proposal number
5
Resolution details
Company ticker
IP:US
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
Materials
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 on an accelerated basis.

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

A Presiding Director is no substitute for an independent Board Chairman. According to the 2022 International Paper annual meeting proxy the IP Presiding Director has limited vague duties and lacks in having exclusive powers. For instance, some of the limited duties may mostly require only Presiding Director approvals, which might be done on short notice after the vast majority of work is done by others, and some of these powers are shared with others:

•Authority to call meetings of independent directors.
•Approving agendas of the Board and meeting schedules but limited to assuring there is ample discussion time.
(No involvement in the development of the agenda. Approving is a task that can be completed the hour before a meeting.)
• approving information sent to the Board.
• organizing the process for evaluating the performance of the Chairman and CEO not less than annually in consultation with the Management Development and Compensation Committee.


Plus, management fails to give shareholders enough information on this topic to make a more informed decision. There is no management comparison of the exclusive powers of the Office of the Chairman and the de minimis exclusive powers of the Presiding Director. International Paper’s Presiding Director, Ms. Ilene Gordon, was rejected by far the most against votes in 2022 of any IP director. International Paper gives no example of the lead director having authority to prevail over the Chairman/CEO if a disagreement occurs.

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