As You Sow is working to help form a coalition of stakeholders to weigh in on the actual (and rumored) shareholder activism at ExxonMobil to promote capital disciple and address climate change. Please sign…
Independent Board Chair
Independent Board Chair
RESOLVED: Shareholders request the Board of Directors adopt as policy, and amend the bylaws as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, be an independent member of the Board. This independence policy shall apply prospectively so as not to violate any contractual obligations. If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair.
This policy would be phased in for the next CEO transition.
- The role of the CEO and management is to run the company.
- The role of the Board of Directors is to provide independent oversight of management and the CEO.
- There is a potential conflict of interest for a CEO to have an inside director act as Chair.
In our view, shareholders are best served by an independent Board Chair who can provide a balance of power between the CEO and the Board. Taking this step is in the long-term interests of shareholders and will promote effective oversight of management.
As of March 2020, approximately 33% of S&P 500 firms had an independent chair. ISS reported in September 2020 that 85 percent of investors responding to its policy survey indicated that an independent chair is their preferred model.
In August 2019 a judge in Oklahoma found as a factual matter that Johnson & Johnson had intentionally played down the dangers and oversold the benefits of opioids. The judge also concluded that the company broke Oklahoma’s public nuisance law, finding that had it had developed “false, misleading, and dangerous marketing campaigns” that had “caused exponentially increasing rates of addiction, overdose deaths” and babies born exposed to opioids.
In September 2020 New York filed civil charges against the company alleging that it played a leading role in “originating, supplying, facilitating, and actively creating a dangerous market for opioids for chronic pain treatment.”
The company’s recent controversies also extend to claims that its talcum powder contained asbestos and caused cancer. In May 2020 the company announced discontinued production of its talc-based baby powder in the United States and Canada. However, in a July 2020 op-ed, the National Women’s Health Network took the company to task for continuing to sell talc-based baby powder abroad, “which means, this product will continue to impact Black and Brown communities, particularly in places like Africa, where it has operations in South Africa, Ghana, and Kenya, and in Brazil, which is home to all three of its business segments.”
In order to ensure that our Board can provide rigorous oversight for our Company with greater independence and accountability, we urge a vote FOR this shareholder proposal.