Microsoft’s Board adopts new “Proxy Access for Director Nominations” policy

We’ve blogged in the past about Microsoft’s commitment to maintaining a strong corporate governance framework and our support for transparent policies that enhance public and investor trust.

Today, we are pleased to announce that our Board of Directors has acted in line with Microsoft’s long-standing corporate governance philosophy by adopting a new “Proxy Access for Director Nominations” policy that permits eligible shareholders to nominate candidates of their choosing for election to the Microsoft Board.

The new policy, included in our Bylaws, provides that

  • holders of at least 3 percent of Microsoft’s outstanding shares, which can be comprised of up to 20 shareholders,
  • holding the shares continuously for at least 3 years,
  • can nominate up to two individuals or 20 percent of the Board, whichever is greater, for election at an annual shareholders meeting.

Our goal is to be both thoughtful and proactive in pursuing good governance. We believe this proxy access framework strikes the right balance for Microsoft by ensuring that Board nominees are supported by long-term shareholders representing a significant, but attainable, proportion of outstanding shares.

Our decision to adopt proxy access grew out of an open and constructive dialogue with our shareholders. Last year we spoke with shareholders about proxy access as part of our annual governance outreach process, having received a shareholder proposal on proxy access. We found a range of views about whether and how to implement proxy access. That proposal ultimately received about 10 percent support at our 2014 annual shareholders meeting.

During 2015, our Board continued to evaluate alternatives to proxy access with the aim of adopting the approach that would best serve our company and shareholders. In June, we received shareholder proposals for our 2015 annual shareholders meeting asking our Board to implement proxy access. We considered the merits of the proposals and spoke with the proponents to understand their goals and motivations. We also sought input from our largest institutional shareholders and others in the corporate governance community.

We believe the policy announced today establishes an additional mechanism for Board accountability, without imposing undue burdens or distractions. As we have said in the past, what is right for us may differ from what is right for others. Having taken this next step in the evolution of corporate governance at Microsoft, we are focused on the important work ahead to advance our mission to empower every person and every organization on the planet to achieve more.

We are committed to continually seeking additional ways to engage with our shareholders. In addition to meeting directly with our institutional investors, we provide our [email protected] email box for communication with our Board, and we encourage shareholders to contact us to address any aspect of our corporate governance framework or the role of the Board. We deeply value continued feedback from our shareholders, and are committed to maintaining active dialogue with our investors to ensure that a diversity of perspectives are thoughtfully considered by the Board.