May 29, 2018
SumOfUs Says Amazon CEO Jeff Bezos Should Not Be His Own Boss
SEATTLE -- Ahead of Amazon’s annual general meeting of shareholders on May 30th, renowned proxy advisor firm, Institutional Shareholder Services, has come out in support of a shareholder resolution calling on the company to separate the role of CEO and Chair of the Board, creating an independent board chair.
Earlier this month, Institutional Shareholder Services (ISS), a renowned proxy advisor firm, in defiance of the board’s recommendations, urged shareholders to vote FOR the resolution explaining:
“A policy that the chairman of the board should be an independent director warrants support as the lead director role does not present a sufficient counterbalance to a combined CEO/chairman position.”
Earlier this year, Amazon shareholders, represented by SumOfUs, an international consumer group, submitted a shareholder resolution (ITEM 5) calling on the company to separate the role of CEO and chair of the board, creating an independent board chair.
Amazon’s current Chief Executive Officer (CEO), Jeff Bezos, also currently serves as Chair of the Board.
Another proxy advisor firm, Glass Lewis, previously supported a shareholder resolution calling for the separation of the roles of CEO and board chair. In a 2016 report, Glass Lewis explained that:
“...Shareholders are better served when the board is led by an independent chairman who we believe is better able to oversee the executives of the company and set a pro-shareholder agenda without the management conflicts that exist when a CEO or other executive also serves as chairman.”
An independent Board Chair has been found in some academic studies to improve the performance of public companies. Separating the roles of Chair and CEO is the norm in Europe, and 51% of S&P 500 boards split the Chair and CEO roles. In an article in The Washington Post about Facebook’s corporate governance structure in 2017, SumOfUs argued that that an independent Chair of the Board would be better able to oversee the executives of the company, improve corporate governance and set a more accountable, pro-shareholder agenda. SumOfUs believes Amazon.com should also adopt these changes for a similar set of reasons.
“There is a clear conflict of interest when a corporation’s board of directors, which is responsible for overseeing the CEO and representing shareholders, is chaired by that same CEO,” explained Lisa Lindsley, Capital Markets Advisor for SumOfUs. “An independent board chair is a necessary first step to put Amazon’s board on the path to effective representation of the interests of all shareholders.”
“Independent Board leadership would be particularly useful at Amazon in providing more robust oversight regarding the company’s association with right-wing organizations, including NRATV and Breitbart. In addition, Amazon has faced increased criticism for workforce exploitation, tax avoidance, and monopolistic practices. Independent Board leadership would result in improved policies and practices to mitigate these risks,” added Lindsley.
Earlier this year, more than 82,000 SumOfUs members called on Amazon to stop streaming NRATV. The petition comes as the NRA doubled-down on its defense of the “right” to own military-grade assault rifles after calls from Parkland high school shooting survivors to institute common-sense gun safety reforms.