A group of 14 institutional investors from the UK, Netherlands, Australia and Canada have called for an overhaul of the American voting standard regarding the election of US corporate directors. They say it is “prone to abuse” and “inconsistent” with democratic values.
In a letter addressed to the American Bar Association (ABA), the organisations - which manage more than $2trn (e1.6trn) - “strongly recommended” that a default rule be accepted which requires a majority shareholder vote to elect a director.
The organisations represented include Dutch giant ABP, the Australian Council of Superannuation Investors (which represents 34 superannuation funds), the UK’s Local Authority Pension Fund Forum (representing 36 funds), the London Pension Funds Authority, RAILPEN Investments and the Universities Superannuation Scheme.
The recommendations follow proposed amendments to the Model Business Corporations Act – encompassing the voting standard – by the ABA’s Committee on Corporate Laws.