Shareholders back independent chair at ratings agency Moody’s

“Landmark” shareholder vote at company meeting

A shareholder proposal calling for an independent board chairman at ratings agency and analysis firm Moody’s Corp. won 56% backing from investors at the company’s annual meeting in New York this week.
The resolution – resisted by the company – was brought by Hermes Equity Ownership Services and the Laborers’ International Union of North America.
Similar proposals in 2009 and 2010 received 30% and 33% support respectively.
“We believe that the recent economic crisis demonstrates that no matter how many independent directors there are on the board, that board is less able to provide independent oversight of the officers if the chairman of that board is also the CEO of the company,” the proponents had said in their supporting statement.
Moody’s argued that it “already has mechanisms in place to provide independent Board leadership, including a lead independent director”. Moody’s is headed by CEO and Chairman Raymond McDaniel.
“We have been actively engaging with Moody’s on behalf of all of our clients to encourage the appointment of an independent chair since 2009 and are delightedwith this landmark result,” said Jennifer Walmsley, Director of Hermes EOS, which is owned by the BT Pension Scheme. She said the vote shows the “tide is turning” in the US in terms of independent chairs.
The vote came as Moody’s announced Jorge Bermudez, former chief risk officer at Citigroup, has been elected to its board of directors to serve on its audit committee and governance & compensation committees.
Meanwhile, today sees Citigroup’s annual meeting – where a proposal from the New York City Pension Funds on the banking giant’s mortgage and foreclosure practices features on the agenda.
“An independent audit of Citigroup’s mortgage and foreclosure policies would ensure that the bank is playing by the rules,” said New York City Comptroller John Liu in a statement. “As long-term investors, the New York City Pension Funds feel this is necessary to both protect our investment and avoid another foreclosure crisis.” The funds hold a combined stake of $281.7m (€192.5m) in the bank.