Institution Theme Category Industry
  • Wellington Management
  • Governance
  • Board & Governance
  • Real estate
Company Year Market Link
Nexpoint Residential Trust 2019 N/A https://www.wellington.com/uploads/2020/10/4dc06a6392f39bcacb4ae0bcaa9a5aeb/664_11_a4_wmc.pdf

Because board responsibilities include overseeing execution, evaluating and compensating top management, and coordinating CEO succession, an independent chair is our preferred structure.
The ESG analyst and GIA followed up on a prior conversation with one of the independent directors. The prior discussion suggested that the directors had not been sufficiently briefed in advance on a major event or recent personnel changes in a timely manner by the CEO/chair. The analysts sought to encourage numerous governance improvements related to the size of the board, diversity on the board, and separation of CEO/chair role.
The board took positive first steps based on our input. It committed to increase the size of the governance committee, include governance as an agenda item at every board meeting, and ensure that the CEO is available to investors.

Details

  • Proponent
  • Management
  • Resolution
  • Board composition
  • Vote
  • For
  • Rationale
  • N/A
  • Details
  • The board committed to increase the board size from five to seven members, but salary cost is a concern. The board is currently all men, so it will look to select a woman for at least one of those two new director roles. Other changes that we will encourage as the company grows include internalizing management and separating the roles of chair and CEO. The objection to separating these roles was also based on salary cost and current simplicity of the business. We suggested that this division of responsibilities would become more important as the company grows and would
    demonstrate a commitment to adopting governance best practices.