Bank of America has agreed to allow investors to nominate directors to the board if they have held at least a 3 percent stake in the company for at least three years, adding momentum to the growing movement in favor of the so-called three-and-three proxy access idea dominating the current proxy season.
A bylaw amendment filed with the SEC states that Bank of America will allow a single shareholder, or a group of as many as 20 shareholders, to nominate directors constituting as much as a third of its board. A group of shareholders, according to the bylaw amendment, would be subject to the same three-and-three principles as an individual.
‘Bank of America’s decision marks a turning point,’ says Anne Simpson, senior portfolio manager at CalPERS, in a press release. ‘It is vitally important that significant, long-term shareowners can put forward candidates for election to the board. This is a fundamental shareowner right and necessary to ensure board accountability.’
So far this month, several major shareholders have come out in favor of shareholder proposals that call for proxy access for shareholders who have held a 3 percent stake in the company for at least three years. Last week, Norges Bank, which manages the world’s largest sovereign wealth fund, said it will back proposals that call for companies to adopt the three-and-three rule, adding its voice to similar calls from CalSTRS, CalPERS, BlackRock, Vanguard and others. Proxy advisory firms ISS and Glass Lewis have also expressed varying degrees of support for the proposals.
The latest push for proxy access has been spearheaded by New York City Comptroller Scott Stringer, who submitted proxy access proposals to more than 75 companies this proxy season.
‘By swiftly enacting meaningful proxy access, the Bank of America board has demonstrated its commitment to accountability and responsiveness to shareowners,’ Stringer says in a press release. ‘Bank of America joins the growing list of companies that have embraced this fundamental right, which will help protect and create long-term value for shareowners, including the city’s pension funds.’
