Illinois Tool Works (ITW) | Independent board chairman at Illinois Tool Works (ITW)

Status
19.33% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
ITW
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO.
Whenever possible, the Chairman of the Board shall be an Independent Director.
Supporting statement
The Company has been notified that John Chevedden, beneficial owner of at least 50 shares of the Company’s common stock, intends to present the following proposal for consideration at the Annual Meeting.
The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board on an expedited basis.
It is a best practice to adopt this policy soon. However this policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition. A lead director is no substitute for an independent Board Chairman. According to the Illinois Tool Works governing documents the ITW Lead Director lacks in having exclusive powers. For instance some of the limited duties only require lead director approvals after the vast majority of work is done and some of these powers are shared with others:
•Acts as a key liaison between the chairman and the independent directors. (A task that others may also have.)
•Have the authority to call meetings of the independent directors, when necessary. (A power that other directors may have.)
•Approve meeting agendas for the Board, but no input before the agenda is ready to be finalized.
•Approve information sent to the Board, but no input before the information is ready to be finalized.
•Approve meeting schedules but only to assure there is sufficient time and no input before the schedule is ready to be finalized.
•Communicate director feedback to the chairman after each Board meeting
Plus management fails to give shareholders enough information on this topic to make a more informed decision. There is no comparison of the exclusive powers of the Office of the Chairman and the exclusive powers of the lead director. The ascending complexities of a company with $60 Billion in market capitalization, like ITW, increasingly demand that 2 persons fill the 2 most important jobs at ITW on an enduring basis —Chairman and CEO.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Rothschild & co Asset Management For

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