Glass Lewis releases 2024 updates to U.S. Benchmark Policy Guidelines – board diversity

On November 16, Glass Lewis released its 2024 U.S. Benchmark Policy Guidelines. The guidelines provide a detailed overview of the key policies Glass Lewis will apply for shareholder meetings held in 2024. 

This post is the second in a two-part series discussing ESG-related updates to the guidelines. In the last post, we discussed Glass Lewis’ 2024 policy updates regarding board oversight of ESG matters. In this post, we discuss amendments relating to board diversity. 

Gender diversity 

Ahead of the 2023 proxy season, Glass Lewis announced that, for Russell 3000 companies, it will generally recommend shareholders vote against the chair of the nominating committee if the board is not at least 30% gender diverse, or against the entire nominating committee if there are no gender diverse directors. Prior to 2023, Glass Lewis took a fixed numerical approach to board gender diversity. Outside of the Russell 3000, Glass Lewis’ pre-existing expectation that companies have at least one gender diverse director remained in place. 

The 2023 board gender diversity policy remains in place for 2024. However, for the 2024 proxy season, Glass Lewis has further clarified the guidelines to indicate that it may refrain from recommending that shareholders vote against directors if the company’s board gender diversity disclosure provides a sufficient rationale for the lack of gender diversity, or a plan to address the lack of diversity, including the timeline for appointing additional gender diverse directors (generally by the next annual meeting or as soon as is reasonably practicable). 

In the case of a recommendation to vote against, Glass Lewis may extend its recommendation to additional members of the nominating committee if the committee chair is not standing for election due to a classified board, or based on other factors, including the company’s size and industry, applicable laws in its state of headquarters and its overall governance profile.

Underrepresented community diversity

The 2023 guidelines introduced a policy on board representation from underrepresented communities. That policy indicated that, for Russell 1000 companies, Glass Lewis generally will recommend voting against the chair of the nominating committee if the board has no directors from an underrepresented community. The 2023 policy continues in place for 2024.

The 2023 definition of “underrepresented communities” included individuals who self-identify as Black, African American, North African, Middle Eastern, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaskan Native, gay lesbian, bisexual or transgender. The 2024 guidelines revise the reference to individuals who self identify as “gay lesbian, bisexual or transgender” to “members of the LGBTQIA+ community.”

The 2024 guidelines have been further clarified to indicate that Glass Lewis will carefully review a company’s disclosure of its diversity considerations and may refrain from recommending that shareholders vote against directors when the board has provided a sufficient rationale or plan to address the lack of board diversity, including a timeline for appointing directors from an underrepresented community (generally by the next annual meeting or as soon as is reasonably practicable). In the case of a recommendation to vote against, Glass Lewis may extend its recommendation to additional members of the nominating committee if the committee chair is not standing for election due to a classified board, or based on other factors, including the company’s size and industry, applicable laws in its state of headquarters and its overall governance profile.

The 2024 guidelines continue to address state laws on diversity, disclosure of director diversity and skills and stock exchange diversity disclosure requirements. Those aspects of the guidelines have not changed for 2024 and are therefore not discussed in this post.

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