If T. Rowe Price is in your stock (or even if it's not), you won't want to miss this Gladstone Place Partners interview with T. Rowe Price Vice President & Global Corporate Governance Analyst Donna Anderson in: "Talking Governance with Donna Anderson," wherein Donna imparts T. Rowe's views and approach on numerous topics of interest including shareholder engagement generally, effective engagement, board diversity, special meeting thresholds, and virtual annual meetings.
Among the key takeaways:
- Donna is concerned that companies spend too much time worrying about - and acting defensively or overly conservatively out of fear of - being the next activist target, i.e., they are over-reacting to a low probability event.
- Over-engagement has become the expectation and norm (i.e., engagement for the sake of engagement) - with questionable ROI. T. Rowe wants event/circumstances-based, rather than frequency-based, engagement.
- She has mixed feelings on board diversity quotas, which - although impactful - can have unintended consequences, such as over-boarding. T. Rowe uses gender as an initial board diversity screen but then, absent gender diversity, applies a second, more nuanced company-specific facts & circumstances screen to see if the board structure makes sense before calling for change.
- T. Rowe believes 25% is the appropriate threshold for calling a special meeting because it is accessible if necessary, but represents an appropriately high hurdle so as to avoid misuse/abuse.
- Acknowledging possible outlier status among investors, Donna supports virtual meetings and the potential they represent for T. Rowe and other institutional investors to participate in more annual meetings, and bolster the "overall impact and effectiveness of the proceedings and the dialogue."
Note that Donna oversees the Governance aspect of the proxy voting policy formation process, whereas the E&S aspects are "owned" by the director of research for Responsible Investing. T. Rowe reportedly separated the "E&S" from the "G" oversight duties based on logical (and logistical) differences between the two.