Glass Lewis’ Report Feedback Service:
Direct, Unfiltered Commentary from Issuers and Shareholder Proponents
Posted by Katherine Rabin, Glass, Lewis &
Co., on Sunday, March 31, 2019
Editor’s Note: Katherine Rabin is
CEO of Glass, Lewis & Co. This post is based on a Glass Lewis
memorandum by Ms. Rabin.
Glass Lewis has long been an advocate of
bringing transparency, accuracy and efficiency to the proxy voting
process. Following the expansion of our
direct engagement program and
Issuer Data Report (“IDR”) service, the
Report Feedback Statement (“RFS”) service is an important next
step in facilitating informed dialogue among all stakeholders.
governance services to institutional investors is Glass Lewis’ core business and
sole focus. Indeed, Glass Lewis does not offer consulting services to corporate
issuers, directors, dissident shareholders or shareholder proposal proponents.
That said, we recognize that there are legitimate questions about the
opportunities available for issuers and shareholder proponents to raise concerns
if they disagree with a proxy advisory firm’s recommendations.
In many cases, those
disagreements relate to the accuracy, completeness and timeliness of the
information underlying voting recommendations. In order to ensure the data Glass
Lewis uses in the formulation of its proxy research reports is complete and
factually correct, Glass Lewis has a
resource center on its website via which public companies and shareholder
proponents can, among other things: (i) submit company filings or supplementary
publicly-available information; (ii) participate in Glass Lewis’ IDR program,
providing an opportunity to review underlying data prior to Glass Lewis
completing and publishing its analysis to its investor clients; and (iii) report
a purported factual error or omission in a research report, prompting a review
process and notifications to Glass Lewis clients of any corrections.
However even when the
facts are not in dispute, differences of opinion can still arise. The Report
Feedback Statement service provides a unique opportunity for public companies
and shareholder proposal proponents—the subjects of Glass Lewis research—to
express their differences of opinion with Glass Lewis’ analysis, and then have
those comments delivered through a unique, focused channel to 3,000+ individuals
who subscribe to Glass Lewis’ research and voting services.
Corporate issuers and
shareholder proposal proponents alike are eligible to participate in this
service by providing a statement directly to Glass Lewis’ research and
engagement team, which will in turn distribute both the Report Feedback
Statement and Glass Lewis’ response to the statement to Glass Lewis’ investor
clients. A disclosure note will also be added to the first page of the relevant
Glass Lewis Proxy Paper® report, notifying investor clients that a Report
Feedback Statement and Glass Lewis’ response are available in the applications.
Any clients that have already downloaded the Proxy Paper report will receive an
email with the Report Feedback Statement and Glass Lewis’ response.
Glass Lewis’ clients
will benefit by conveniently receiving unfiltered commentary on our analysis
from the company or shareholder proponents who submitted the proposals they are
examining. That real-time perspective will provide an additional dimension for
their consideration and will be easily accessible, with reasonable time to
review, even within the peak of proxy season.
In conjunction with our
IDR program and broader engagement efforts, we believe the RFS service will
serve to promote dialogue and mutual understanding, and to improve the proxy
voting process for all stakeholders. In the same spirit that we invite issuers
and shareholder proponents to provide feedback on our Proxy Paper analysis
through RFS, we welcome feedback on the RFS service itself, or any other aspect
of our approach to governance and engagement, at
email@example.com. We strongly encourage any interested parties to join
How RFS Works
The 2019 proxy season
(March through May) will serve as a pilot for the RFS service, which will be
provided for a limited number of annual general meetings at U.S.-listed issuers.
It is not available for special meetings, including proxy contests, consents,
mergers and acquisitions. The goal will be to broaden participation after the
2019 proxy season, including introducing the service across several markets
Interested parties can
sign up to participate in the RFS service and read a complete FAQ
To ensure that Glass
Lewis’ clients are able to assess RFS feedback in a timely manner, there are
several factors that impact the ability to subscribe to the Report Feedback
All RFS subscribers
must also participate in the free Issuer Data Report service, which requires
issuers to sign up at least 30 days in advance of their annual general meeting
Once Glass Lewis’
Proxy Paper is available, RFS subscribers need to address any factual errors
or omissions within two (2) business days of the initial publication and
deliver their feedback statement within four (4) business days.
timeline is achievable since subscribers are required to participate in the IDR
service, so most issues should be resolved in advance of the initial publication
of the Proxy Paper report. Nonetheless, the more items a potential subscriber
does earlier in the process, the better the odds of being able to participate.
While we look forward
to expanding the RFS in future, for the 2019 pilot program availability is
limited to 12 companies and/or shareholder proponents per
week. The cap is calculated based on the receipt date (actual or
reserved) of a subscriber’s feedback statement.
stakeholder in the proxy voting process has put considerable thought into their
work and their approach on a given vote, we expect that all subscribers respect
these efforts by exercising the appropriate level of decorum and civility when
putting together their Report Feedback Statement; please refer to the
RFS Etiquette Guide for further information.
limit their statements to their views on Glass Lewis’ research, and should
refrain from, directly or indirectly, commenting on the views, analysis and vote
recommendations of other proxy advisors, and from providing a comparative
analysis between the research published by Glass Lewis and the research
published by another proxy advisor.
Each statement must be
signed by an executive at the organization, authorized to issue external
statements on behalf of such organization, and feature contact information to
enable investors to follow up with the organization.
Issuers and shareholder
proponents are permitted to submit one Report Feedback Statement per annual
general meeting. However, if the company makes an additional public filing that
results in a material revision to Glass Lewis’ research report, issuers will be
permitted, at Glass Lewis’ discretion, to submit one additional Report Feedback
Statement, within two (2) business days following the publication of the revised
Glass Lewis research report.
In order to facilitate
processing and distribution, there is a distribution fee associated with
participation in the RFS service, and subscribers must also purchase a copy of
the relevant Proxy Paper on which they wish to provide feedback. However, the
RFS service is not intended to charge issuers or shareholder proponents for
resolving factual errors or omissions. To be clear, Glass Lewis does not charge any fees
for resolving these types of issues, and there are no time restrictions on
reporting a factual error.
Glass Lewis will always
address any factual
errors or omissions in a timely fashion through its standard correction
process. Therefore, subscribers should always report these items to Glass Lewis
as soon as they are discovered within a Proxy Paper report. Once a valid error
or omission is reported, Glass Lewis will update the relevant report and
republish it to clients with a note describing the changes.
Harvard Law School Forum
on Corporate Governance and Financial Regulation
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