Amazon shareholders call for independent chair
The group, represented by international consumer group SumOfUs, has submitted a second shareholder resolution to that effect, after last year’s resolution did not pass, with only 40 per cent of independent shareholders supporting the effort.
SumOfUs is also in favour of splitting the roles of CEO and board chair at Facebook, arguing in The Washington Post that an independent chair of the board would be better able to oversee the executives of the company, improve corporate governance and set a more accountable, pro-shareholder agenda.
The group said in a statement that Amazon should adopt these changes for a similar set of reasons.
“There is a clear conflict of interest when Amazon’s board of directors, which is responsible for overseeing Jeff Bezos and representing shareholders, is chaired by Jeff Bezos,” Lisa Lindsley, capital markets advisor for SumOfUs, said.
“An independent board chair is a necessary first step to put Amazon’s board on the path to effective representation of the interests of all shareholders.”
Lindsley cited a range of issues, which she said demonstrate the fact that Amazon’s profits come at the expense of communities, including implicit support through advertisements of controversial news site Breitbart, employment and wage policies and its “race-to-the-bottom competition for HQ2”.
“The lesson is simple,” she said, “Jeff Bezos shouldn’t be his own boss.”
SumOfUs also cited some academic studies that have found that splitting the roles of CEO and chair of the board improves the performance of public companies, and noted that this is typical in Europe, where 51 per cent of S&P 500 boards split the chair and CEO roles.
A 2016 report from proxy advisory firm Glass Lewis also called for the separation of the roles of CEO and board chair.
“…Shareholders are better served when the board is led by an independent chairman who we believe is better able to oversee the executives of the company and set a pro-shareholder agenda without the management conflicts that exist when a CEO or other executive also serves as chairman,” Glass Lewis said in the report.
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