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Corporate Governance

: The Harvard Law School Corporate Governance Blog

Florida SBA Seeks to Use Proxy Voting to Promote Good Governance Practices

By Harvard Law School Program on Corporate Governance

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Editor?s Note: Michael McCauley is Senior Officer, Investment Programs & Governance, of the Florida State Board of Administration (the ?SBA?). This post is based on an excerpt from the SBA?s 2011 Corporate Governance Report, which is available here. Further information regarding the SBA?s governance activities, including proxy voting data, is available here.

The State Board of Administration (SBA) supports the adoption of internationally recognized governance practices for well-managed corporations including independent boards, transparent board procedures, performance-based executive compensation, accurate accounting and audit practices, and policies covering issues such as succession planning and meaningful shareowner participation. The SBA also expects companies to adopt rigorous stock ownership and retention guidelines, annually seek shareowner ratification of external auditors, and implement well designed incentive plans. As noted in a recent Fitch Ratings research piece, "Assessing an issuer's governance practice begins with its board of directors. An independent, active, knowledgeable, and committed board of directors signals a robust governance framework. A board that is not committed to fulfilling its fiduciary responsibilities can open the door for ineffective, incompetent, and in some cases, unscrupulous management behavior."

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Full post as published by The Harvard Law School Corporate Governance Blog on March 19, 2011 (boomark / email).