Wells Fargo and Ameriprise Financial are the latest to join the growing roster of companies—including some of the largest in the world—that are requiring their boards of directors to receive a majority of the votes cast by shareholders in uncontested director elections.
Both companies said they expect a director who receives less than a majority of the votes to resign from the board promptly after certification of voting results. Their respective boards will publicly disclose their decision whether to accept the resignation within 90 days. Directors will continue to be elected in a contested election by a plurality of votes cast.
Ameriprise said its bylaw amendments also require candidates for a director position to provide additional information about potential conflicts or special interests that could affect their ability to act in shareholders’ best interests. Candidates will have to sign a representation and agreement confirming they have no conflict of interest and are willing to abide by the mandatory resignation policy.
“I am pleased that the board has been proactive in addressing a key corporate governance issue on the minds of shareholders,” said Jim Cracchiolo, Ameriprise chairman and CEO, in a statement “This new standard will ensure an even higher level of accountability to Ameriprise Financial shareholders.”
Likewise, Dick Kovacevich, Wells Fargo chairman and CEO of Wells Fargo, also supported his board’s actions in a statement. “We’ve carefully considered the views of our shareholders in this decision, and we believe a majority vote standard will further increase the accountability of our directors to our shareholders,” he said. “We believe this change is consistent with leading corporate governance practices, and that it’s the right thing to do for all our stakeholders.”