United Church Funds is proud to have coordinated a shareholder resolution with Gilead Sciences, Inc. that received 43.4% support at Gilead’s annual general meeting on May 6, 2020. The resolution requested the company to separate the position of the Chair of the Board from the CEO position.
“We are pleased to receive very high-level support for an investor-led resolution. This result indicates that shareholders believe that proper oversight of a company includes a strong independent board chair,” said Katie McCloskey, UCF’s Director of Social Responsibility.
United Church Funds believes a structure where the CEO runs the business and is accountable to a board led by an independent chair is in the best interests of the company’s shareholders for the following reasons:
- Eliminates Structural Conflicts of Interest in Dual Role. The management of a complex global pharmaceutical company is a full-time job. It is unrealistic – and needlessly complicated – to expect one person to perform well as CEO on top of his or her responsibilities for providing rigorous board oversight. An independent Board Chair eliminates the structural conflicts of interest caused by the CEO’s essentially being his or her own boss and clarifies where the authority of the CEO ends and the responsibility of the independent board members begins.
- Significant Governance Concern Resulting from Board Failure to Oversee Material Risks. In light of potentially material legal, regulatory, financial and reputational risks, as well as controversies and legal challenges facing the company, we are concerned that the board is not providing the necessary oversight of the company’s culture, strategy and risk management. Adopting best governance practices, including an independent Board Chair, would help strengthen that oversight.
Read a full explanation of our rationale here.