Glass Lewis, one of the two major firms which provide advisory service to investors relative to voting for or against director candidates, has announced some substantial (if not surprising) revisions to its review standards designed to foster ESG-related elections to boards.  For 2023, among other changes (and in some cases depending on size of the registrant public company):

• tightened review of gender and other diversity on boards
• mandatory disclosure of corporate racial/ethnic demographics
• limits on outside board involvements (query reflecting criticism of Musk being diverted to Twitter?)
• specific requirement of articulation of board supervision of cyber risk, environmental and climate-related matters
• focus on officer exculpation, tying long-term incentives more close to performance, nature and duration of poison pills and issuance of shares with unequal voting rights, and with supermajority voting and classified boards.

The foregoing list is not complete, nor does it reflect the granular treatments to be applied within various categories.  As proxy advisory firms influence stock value and thus impact corporate governance, public companies had best look carefully this year at Glass Lewis (and also ISS) pronouncements; there are changes that affect not just disclosure but also substance.

Critics of ESG and similar standards, a growing number questioning their appropriateness as standards for investment return, are not making progress with their critique in this arena.