8-KCorporate ChangesExhibits & Filings

American Water Works Company, Inc. 8-K Report, Bylaw Amendment (Dec 10, 2020)

Filed December 10, 2020For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) announced significant updates to its corporate governance and ethics policies through an 8-K filing on December 10, 2020. The company's Board of Directors approved amendments to its Amended and Restated Bylaws to include a 'proxy access' provision, allowing eligible shareholders meeting specific ownership thresholds (3% or more of common stock for three years) to nominate director candidates for inclusion in the company's proxy materials. This provision will be effective for the 2022 annual meeting. Additionally, AWK adopted a new, comprehensive Code of Ethics applicable to all directors, officers, and employees, which replaces the prior code and incorporates updated sections on environmental leadership, corruption, bribery, social media usage, and managerial expectations, while maintaining the core ethical principles of the previous code. These changes indicate a proactive approach by AWK's management and Board to enhance shareholder engagement and reinforce ethical standards across the organization. The proxy access bylaw empowers long-term, significant shareholders with a greater voice in board composition, a move generally viewed positively by investors as it aligns management interests with those of shareholders. The updated Code of Ethics demonstrates a commitment to responsible corporate conduct and transparency, particularly in areas of growing importance such as environmental stewardship and anti-corruption measures. Investors should note that these provisions are effective immediately or for future meetings as specified, and the full details are available in the filed exhibits.

Key Highlights

  • 1Adoption of a 'proxy access' bylaw allowing eligible long-term shareholders (3%+ ownership for 3 years) to nominate directors for inclusion in company proxy materials.
  • 2Proxy access provision will be effective for the 2022 annual meeting of shareholders.
  • 3The proxy access allows for the nomination of up to two directors or 20% of the board, whichever is greater.
  • 4Adoption of a new, comprehensive Code of Ethics applicable to all directors, officers, and employees.
  • 5The new Code of Ethics replaces the prior code and includes updated sections on environmental leadership, corruption, bribery, and social media.
  • 6The adoption of the new Code of Ethics did not involve any waivers of prior ethical provisions.
  • 7The company has filed the Amended and Restated Bylaws and the new Code of Ethics as exhibits to the 8-K filing.

Frequently Asked Questions

Proxy access is a provision in the company's bylaws that allows eligible shareholders, who meet certain ownership and holding period requirements (3% of common stock for three continuous years), to nominate director candidates and have them included in the company's proxy materials for annual meetings. This gives long-term, significant shareholders a greater ability to influence board composition.

The proxy access bylaw adopted by American Water Works Company, Inc. took effect upon adoption on December 10, 2020, but will be first available to shareholders beginning with the company's 2022 annual meeting of shareholders.

The new Code of Ethics replaces the prior version and includes updated and clarified topics, such as sections governing environmental leadership, corruption and bribery, use of social media, and expectations for managers. However, the core ethical principles remain substantively unchanged.

No, the adoption of the new Code of Ethics did not result in any explicit or implicit waiver with respect to any director, officer, or employee of the company from any provision of the prior Code of Ethics. The focus remains on the company's values and fundamental ethical principles.