State Street Corporation | Separate chair and CEO at State Street Corporation

Status
AGM passed
AGM date
Previous AGM date
Resolution details
Company ticker
ZYA
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
Financials
Company HQ country
United States
Resolved clause
RESOLVED:  State Street Corporation ("State Street" or "Company") shareholders ask the Board to adopt a policy and amend the bylaws as necessary to require the Chair of the Board of Directors, whenever possible, be an independent member of the Board. This policy should be phased in for the next CEO transition. Compliance is waived if no independent director is available and willing to serve as Chair.
Supporting statement
RESOLVED:  State Street Corporation ("State Street" or "Company") shareholders ask the Board to adopt a policy and amend the bylaws as necessary to require the Chair of the Board of Directors, whenever possible, be an independent member of the Board. This policy should be phased in for the next CEO transition. Compliance is waived if no independent director is available and willing to serve as Chair. SUPPORTING STATEMENT: The role of the CEO and management is to run the Company. The Board of Directors' role is to provide independent oversight of management and the CEO. We believe a CEO cannot be their own overseer while managing the business without potential conflicts of interest.   State Street's CEO, Ronald O'Hanley, serves as CEO and Chair of the Company's Board of Directors. Combining these two roles for one person weakens State Street's governance structure, potentially harming shareholder value. We believe that combining these roles gives the CEO unnecessary additional power over the Board, potentially weakening their authority and oversight of management. Overseeing the Board is a time-intensive responsibility. A separate and independent Chair leaves the CEO free to manage the Company and build effective business strategies. Mr. O'Hanley is also on the boards of Unum [1] and ABL Space Systems, Inc. [2] , two non-profit organizations [3] , two college/university boards [4] , and a number of other finance-related organizations [5] which also requires time and energy.   With such pressure on our CEO's time, our Company and shareholders would benefit if an independent board member assumed Chair duties. Intel's former Chair, Andrew Grove stated, "The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee? If he's an employee, he needs a boss, and that boss is the Board. The Chairman runs the Board. How can the CEO be his own boss?" Numerous institutional investors recommend separation as simple good governance. For example, CalPERS' Principles & Guidelines encourage separation, even with a lead director in place. [6] Proxy advisors often recommend votes in favor of shareholder resolutions urging an independent Chair. And in its paper on the 2024 proxy season, Georgeson noted there were 46 proposals asking for a separate chair and these resolutions averaged votes in favor of 31%, as they had in the previous two years. [7] An independent Chair is the prevailing practice in the United Kingdom and many international markets. An independent Chair and vigorous Board can improve focus on important ethical and governance matters, strengthen accountability to shareowners and help forge long-term business strategies that best serve the interests of shareholders, consumers, employees, and the Company. To foster a simple transition, we propose this policy be phased in when the next CEO is chosen. We urge a vote FOR this resolution. [1]   https://investors.unum.com/governance/board-of-directors/default.aspx   [2]   https://www.sec.gov/Archives/edgar/data/1807044/000095017223000191/xslFormDX01/primary_doc.xml [3]   https://bilh.org/about/leadership/board-of-trustees ;  https://www.wbur.org/inside/board-of-directors [4]   https://www.iyrs.edu/about/board-of-trustees ;  https://www.maxwell.syr.edu/about/school-leadership/maxwell-advisory-board [5]   https://commerceri.com/about-us/ronald-p-ohanley/ ;  https://www.iif.com/About-Us/Board ;  https://fsforum.com/who-we-are ;  https://www.bostonfed.org/about-the-boston-fed/board-of-directors.aspx [6]   https://www.calpers.ca.gov/docs/forms-publications/governance-and-sustainability-principles.pdf p. 13-14 [7]   https://content-assets.computershare.com/eh96rkuu9740/1LaV0tgtDhSIIWK8EzZAJH/73c32a245e36b8ec80cb910d591480e7/Georgeson_2024_Proxy_Season_Review.pdf p.30

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