|How has the company responded to its most recent crisis? What failures led to the crisis, how has the company assessed accountability, and what steps has the company taken to strengthen governance and oversight to both resolve the crisis and mitigate the risk of recurrence?|
|Walgreens Boots Alliance||2019||US||Investment Stewardship Report 2020||https://www.wellington.com/uploads/2020/10/4dc06a6392f39bcacb4ae0bcaa9a5aeb/664_11_a4_wmc.pdf|
We raised governance concerns with company representatives, informing them of our voting decisions on two upcoming shareholder proposals on the ballot at their upcoming annual general meeting.
The first proposal asked the company to appoint an independent board director as chairman during the next leadership transition. The ESG analyst concluded that questions around current leadership structure and unclear succession planning warranted support for the first proposal. The second proposal requested a report on governance changes (including oversight and risk management) since 2012 in response to the opioid epidemic. We did not find the request for a written report onerous and believe that shareholders would benefit from comprehensive disclosure on this issue. We were disappointed that the company was unable to reach a compromise with the proponent ahead of the vote. The company resisted the proposal in part because of outstanding litigation on the issue but acknowledged that the proposal would garner significant shareholder support.
- Shareholder Proposal
- Board composition and social risk disclosure
- Shareholders would benefit from comprehensive disclosure on this issue and the proposal was not onerous
We did not find the request for a written report onerous and believe that shareholders would benefit from comprehensive disclosure on this issue….
We supported the proposal to appoint an independent board director, in line with our voting guidelines, and the proposal received approximately 38% support from shareholders. We also supported the proposal to report on opioid-related governance changes, which ultimately passed with approximately 60% support from shareholders.
The company was responsive to the second proposal, publishing a board report on the oversight of risk related to opioids during 2019. The report demonstrated the board’s commitment and the company’s efforts to address the opioid epidemic. The
shareholder proposal for independent board leadership was also on the 2020 ballot, which we supported.