Summary
ServiceNow, Inc. (NOW) has filed an 8-K report detailing significant changes to its corporate governance practices, specifically regarding director elections. Effective December 7, 2014, the company adopted a majority vote standard for uncontested director elections, meaning nominees must receive more votes cast in favor than against to be elected. This change is accompanied by an amendment to the Corporate Governance Guidelines, requiring directors to tender an irrevocable resignation upon failing to receive the required vote for re-election. The Board of Directors will then review and decide whether to accept the resignation. This move signals an enhanced commitment to shareholder accountability and responsiveness to shareholder sentiment in director selection.
Key Highlights
- 1ServiceNow adopted a majority vote standard for uncontested director elections, effective December 7, 2014.
- 2Under the new standard, directors must receive a majority of votes cast ('for' vs. 'against') to be elected or re-elected.
- 3A plurality vote standard will be maintained only in contested director elections.
- 4Directors are now required to tender an irrevocable resignation following their election or re-election.
- 5This resignation becomes effective if the director fails to receive the required vote for re-election.
- 6The Board of Directors will accept or reject the tendered resignation following a failure to meet the required vote.
- 7These changes aim to increase director accountability to shareholders.