Glass Lewis recently announced an update of its guidelines, which temporarily relaxes its standard policy against virtual meetings in light of COVID-19. The update provides that “[f]or companies opting to hold a virtual-only shareholder meeting during the 2020 proxy season (March 1, 2020 through June 30, 2020), [Glass Lewis] will generally refrain from recommending to vote against members of the governance committee on this basis, provided that the company discloses, at a minimum, its rationale for doing so, including citing COVID-19.” This formal update of Glass-Lewis’s guidelines comes on the heels of statements by both Glass-Lewis and ISS indicating openness to relax their positions on virtual meetings, which we discussed here.
In both the announcement and the updated guideline, Glass Lewis stated that after June 30, 2020, the relaxed policy will expire regardless of circumstances, and Glass Lewis’s standard policy will apply. The announcement reasoned that “[e]ven if the pandemic continues well beyond this date, companies have been given sufficient time to address shareholder concerns as outlined in [Glass Lewis’s] standard policy.” Glass Lewis’s standard policy is to “generally recommend voting against members of the governance committee where the board is planning to hold a virtual-only shareholder meeting and the company does not provide” “robust disclosure in a company’s proxy statement which assures shareholders that they will be afforded the same rights and opportunities to participate as they would at an in-person meeting.”
Similar to Glass Lewis’s guideline update, Governor Cuomo’s March 20th Executive Order provides temporary relief for New York companies holding virtual only meetings, which we discuss in more detail here.