|Royal Caribbean Group||2020||N/A||https://us.dimensional.com/about-us/investment-stewardship|
In November 2019, Dimensional sent a letter to Royal Caribbean, a US-based cruise company, expressing our concerns about its disclosure on political and lobbying expenditure oversight. While the portfolio company already disclosed a political contribution policy, it was unclear to Dimensional whether the policy covers lobbying expenditure and membership in trade associations and other groups that may engage in political activity on behalf of members. Furthermore, the policy only detailed management oversight of political contributions and did not identify any board-level oversight mechanisms. As part of Dimensional’s original letter, we encouraged the portfolio company to disclose board oversight of political and lobbying contributions, and noted that we reserve the ability to vote against directors if the portfolio company is unresponsive to shareholder concerns.
Dimensional did not hear from the portfolio company following receipt of our letter. We subsequently followed up with the company on several occasions, through both additional letters and phone inquiries. The company was unresponsive.
As 2020 progressed, the travel industry was particularly hard hit by the COVID-19 crisis. Given that 2020 is an election year and the travel industry will be impacted by a range of public policy decisions related to economic relief and health and safety regulations, we anticipate that political and lobbying spending could increase, making robust board oversight even more important to protecting shareholder interests.
- Disclosure on political and lobbying expenditure oversight
Given the insufficient information provided by the portfolio company to assess board oversight of political and lobbying contributions and the unresponsiveness of the portfolio company to Dimensional’s letter and subsequent inquiries, we voted against members of the board’s Audit Committee, which is responsible for risk oversight.