Shearman & Sterling LLP Trends in E&S Proposals in the 2022 Proxy Season | 26
11
EEO-1 report is a mandatory workforce data collection required from
private employers with 100 or more employees, as well as federal
contractors with 50 or more employees, that is shared with the U.S. Equal
Employment Opportunity Commission. Information collected includes data
by race/ethnicity, sex and job categories.
12
See Georgeson, An Early Look at the 2022 Proxy Season, at 15, https://
www.georgeson.com/us/insights/2022-early-proxy-season-review (2022).
13
See ISS, "2022 United States Proxy Season Preview: Environmental &
Social," at 9, https://insights.issgovernance.com/posts/2022-united-states-
proxy-season-preview-environmental-social (March 30, 2022).
14
See Georgeson, An Early Look at the 2022 Proxy Season, at 16,
https://www.georgeson.com/us/insights/2022-early-proxy-season-review
(2022); see also Saijel Kishan, "What are civil rights audits, and why are
companies doing them?," Bloomberg, https://www.bloomberg.com/news/
articles/2022-05-03/what-civil-rights-audits-are-and-why-firms-do-them-
quicktake?leadSource=uverify%20wall (May 3, 2022).
15
See ISS, "2022 United States Proxy Season Preview: Environmental &
Social," at 13, https://insights.issgovernance.com/posts/2022-united-states-
proxy-season-preview-environmental-social (March 30, 2022).
DEI EFFORTS AND POLITICAL SPENDING REMAIN HOT TOPICS IN
SOCIAL PROPOSALS; RACIAL JUSTICE AND CIVIL RIGHTS AUDITS
GAIN IMPORTANCE
Proposals related to social matters represented the largest
category (41%) of all submissions in 2022. As shown below,
they covered a wide range of topics. Diversity, equity, and
inclusion (DEI) efforts continue to be in the spotlight in 2022,
although the number of proposals on EEO-1 disclosure
11
and
workforce diversity decreased significantly to 28, down from
61 in 2021. Shareholders also remained focused on issuers'
political spending, both in the context of contributions
and lobbying, accounting for 86 proposals in 2022
(a 13% increase from 2021).
36
5
17
7
21
25
43
10
13
4
25
86
23
16
1
Board, executive and
workplace diversity
EEO-1 data disclosure
Employee
arbitration policies
Employee
health & safety
Racial, gender and
other pay equity
Sexual harassment
Human capital
issues — other
Racial equity and/or
civil rights audits
Animal rights
Filed Social Proposals by Topic
DEI proposals focused on diversity in the workplace and
in the boardroom. There were also typical requests for data
required under EEO-1 and information about gender and
racial pay gaps. In this regard, a noteworthy trend from
the 2022 proxy season is the growing number of proposals
requiring companies to provide disclosure beyond the data
collected under EEO-1.
12
Such proposals demand enhanced
disclosure on recruitment, retention and promotion rates
of employees considering gender, race, and ethnicity.
13
Additionally, shareholder proposals calling for racial
equity and civil rights audits (i.e., an independent evaluation
on whether and how a company monitors and manages
incidents of discrimination against minority groups within
the organization)
14
gained momentum in 2022, growing
from 9 submissions last year to 43 in 2022. Institutional
Shareholder Services noted in its voting policy for the
2022 proxy season that it would analyze these proposals
on a case-by-case basis, taking into account various
factors, such as "the company's established process
or framework for addressing inequality and discrimination
internally, the company's recent track record on equity
issues, and whether the company's policies and actions
are aligned with market norms on civil rights, and racial
or ethnic diversity."
15
Charitable giving
Corporate purpose
Human rights
Political spending —
contributions and lobbying
Public health
Social issues — other
Source: "Shareholder Voting Trends (2018-2022)," The Conference Board,
https://www.conference-board.org/topics/shareholder-voting/trends-2022-
brief-1-environmental-climate-proposals and https://www.conference-
board.org/topics/shareholder-voting/trends-2022-brief-2-human-capital-
management-socialproposals
