During the previous three academic years (2011-2012 through 2013-2014), the SRP operated a clinic that assisted institutional investors (several public pension funds and a foundation) in moving S&P 500 and Fortune 500 companies towards annual elections. The investors that worked with the SRP clinic during all or part of this period serve more than 3 million people, and the aggregate value of assets that they manage exceeds $400 billion. Additional information about each of these investors is provided here.
The work on the board declassification project was completed in the summer of 2014, having contributed to board declassification at about 100 S&P 500 and Fortune 500 companies. A detailed report on the completed board declassification project will be issued in 2015. In the meantime, significant information on the results of the project can be found on this website.
Major results of the SRP clinic's work during its three years of operation (covering the 2012, 2013 and 2014 proxy seasons) include the following:
- 121 Successful engagements: 121 of the companies that received proposals for annual meetings during the 2012, 2013 and/or 2014 proxy seasons – over 80% of such companies – agreed to move toward annual elections following the submission of board declassification proposals for meetings during the 2012, 2013 and/or 2014 proxy seasons. Further details on these successful engagements are available on the Negotiated Agreements page.
- 98 Board declassifications: The boards of 98 S&P 500 and Fortune 500 companies were declassified as a result of the work by the SRP clinic and investors that worked with the SRP clinic (listed on the Declassifications page). These declassified companies had an aggregate market capitalization exceeding one trillion dollars as of June 30, 2014. Additional declassifications are expected to result in the future as management declassification proposals go to a vote at other companies that, during the clinic’s three years of operation, entered into agreements to bring such management proposals to a vote.
- 65 Successful proposals: 65 precatory declassification proposals passed (listed on the Successful Proposals page) – 39 proposals passed at meetings during the 2012 proxy season, with average support exceeding 82% of votes cast, and 19 proposals passed at meetings during the 2013 proxy season, with average support exceeding 79% of votes cast, and 7 proposals passed at meetings during the 2014 proxy season, with average support exceeding 88% of votes cast.
Annual elections are widely viewed as corporate governance best practice. Board declassification and the resulting annual elections could make directors more accountable and thereby contribute to improving performance and increasing firm value. The substantial shareholder support for board declassification, and the value of the work done on the subject by the SRP clinic and investors that worked with the SRP clinic, will be discussed in detail in the final report of the declassification project.
Inquiries about the work of the SRP clinic during the years 2011-2012 through 2013-2014 should be directed to Emily Lewis, administrative director of the Program on Institutional Investors.