How Many Directorships is Too Many? Vanguard’s Evolving View

May 10, 2019

Recently, Vanguard updated its Vanguard Fund proxy voting guidelines, disclosing a proxy voting policy relating to what Vanguard considers to be overboarded directors, based on the evolving role of directors and its assessment of the time and energy required to effectively fulfill director responsibilities.

Effective for this proxy season, Vanguard will generally vote against named executive officers that sit on more than one outside public company board (for a total of two public company boards), except at the company at which he or she is an executive officer.  In addition, for non-executive directors, Vanguard will vote against directors who sit on more than four total public company boards, except that the no-vote will generally not extend to the director where he or she is the chair of the board.  Vanguard may, on a case-by-case basis, cast its vote for an otherwise overboarded director if there is a public commitment to stepping down from a sufficient number of boards that would fall within the proxy voting guidelines.

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