TARGET CORPORATION | Policy for independent board chair at TARGET CORPORATION

Status
29.30% votes in favour
AGM date
Previous AGM date
Proposal number
4
Resolution details
Company ticker
TGT
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Independent board
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders ask the Board to adopt a policy, and amend the bylaws as necessary, to require the Board Chair to be an independent director. The policy may provide that (i) if a Chair at any time ceases to be independent, the Board shall replace the Chair with a new, independent, Chair, (ii) compliance with this policy is waived if no independent director is available and willing to serve as Chair, and, (iii) that the policy shall apply prospectively so as not to violate any contractual obligation existing at its adoption.
Supporting statement
SUPPORTING STATEMENT: Dear fellow shareholders,



In 2014, Brian Cornell joined Target to serve as both the company’s CEO and its Board Chair. The very next year, in 2015, a shareholder proposal asked for Board Chair independence policy—and it won nearly 40% of the vote.



Now, we ask shareholders to again consider such a policy.



Indeed, having a combined CEO/Chair structure can weaken a corporation’s governance and harm shareholder value. As such, it has been increasingly falling out of practice.



In fact, according to the Spencer Stuart 2022 Board Index, a majority of S&P 500 boards no longer have a combined Chair/CEO, placing Target in the minority in this regard.



The shift toward board Chair independence makes sense, considering that management’s most important role is to effectively run the company and the board’s is to effectively provide oversight of management, so a lack of checks and balances may arise when the board is chaired by executive management.



“The chair of the board should ideally be an independent director,” reports Institutional Shareholder Services (ISS), “to help provide appropriate counterbalance to executive management.”



And reports Glass Lewis: “Glass Lewis’ view is that shareholders are better served when the board is led by an independent chair, a role which we believe is better able to oversee the executives of the Company and set a pro-shareholder agenda without the management conflicts that exist when a CEO or other executive also serves as chair. This, in turn, leads to a more proactive and effective board of directors.”



Glass Lewis further found that empirical evidence suggests that firms with independent board chairs outperform companies with non-independent directors, and companies with non-independent directors “tend to follow fewer positive corporate governance practices.”



“We believe that the presence of an independent chair fosters the creation of a thoughtful and dynamic board not dominated by the views of senior management,” concludes Glass Lewis.



We agree—and think that to modernize the company’s corporate governance structure moving forward, it ought to be chaired by an independent director. Thank you.

Filed by the Accountability Board.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Rothschild & co Asset ManagementFor
Kutxabank Gestion SGIIC SAU.For
Anima SgrForIt is in shareholders' best interest to separate the positions of CEO and chairman in order to avoid potential conflicts of interest that may arise when one person holds both positions.

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