IFSWF Santiago Principles

Proposed Changes to the IFSWF Membership Agreement: Board Elections

The Board is recommending that the election of Non-Elevated Directors (NEDs) be made by each Member having 3 votes for 3 NED positions - 1 vote for each NED.

At the last Board election in 2015, Members had 1 vote for 3 NED positions. The Board is of the view that the old election process was both unusual as well as being a less representative method of election. The new method will be better aligned with accepted practice for electing Boards and fairer.

To ensure that there is full alignment between the Membership Agreement and the election process, the IFSWF Board is proposing new wording for the Membership Agreement - section 8.1 Appointment and Removal of Directors.

  1. What change is proposed?
    The Board is proposing new wording for section 8.1 Appointment and Removal of Directors of the IFSWF Membership Agreement regarding the election of Non-Elevated Directors (NEDs).

    The new wording will define an election process that allows for each Member to cast three votes for three NED positions. It will also allow for a simple declaration of appointment if the Director positions are non-competitive (i.e. the number of candidates equals the number of positions).

  2. Why is the change being proposed?

    The Board is recommending that the election of NEDs be made by each Member having 3 votes for 3 NED positions. At the last Board election in 2015, Members had 1 vote for 3 NED positions. The Board is of the view that the old election was both unusual as well as being a less representative method of election. The new method will be better aligned with accepted practice for electing Boards and fairer.

  3. The changes seem small and “technical” – why are they needed?

    The changes have been recommended by Slaughter & May, IFSWF’s corporate lawyers. Slaughter & May have recommended the changes to ensure there is full alignment between the Membership Agreement and the voting system. It is important that all Members are confident that the election of the Board reflects their wishes.

  4. Why is the change being proposed in advance of the Annual Meeting?

    By proposing a change now, the Board is seeking clarity on the method election ahead of the Annual Meeting. This will save time at the Annual Meeting and mean that all Members and all candidates for the Board will be clear as to the election process.

  5. How much support does the proposed amendment require to pass?

    The amendment requires a majority of 90% of those who vote to pass.

  6. When does the vote close?

    Voting and administration of the proposed amendment must be completed within one calendar month. Voting closes at 17:00 BST on Friday 29 June. The IFSWF is incorporated in the UK and the Membership Agreement is governed by the UK Companies Act of 2006, section 296 (2). The full (current) Membership Agreement is available for all Members here.

  7. How do I vote?

    Voting is via a button on this webpage. There is One Vote for each full IFSWF member. Members are asked to identify their affiliation to ensure that there is just One Vote per Member. Only the IFSWF Secretariat will receive this information and how each Member votes will remain confidential. This is to ensure a free and fair election.
     

  8. How should I vote?

    The Board is recommending that you vote YES and support the amendment, however, this is a matter for each member to decide.

The proposed new wording for 8.1 Appointment and Removal of Directors is (new or amended text is emphasised below):

The process for determining the new Directors shall be as follows: (i) first a vote will be held to elect the Deputy Chair from those persons nominated for such position (with the nominee receiving the highest number of votes becoming the Deputy Chair and if that nominee is also nominated for one of the Non-Elevated Director positions that nominee shall not be included in the pool of nominees for the Non-Elevated Director positions); and (ii) then, a vote will be held to elect Non-Elevated Directors (with each Member being entitled to vote for a number of nominees equal to the number of vacancies (provided that no more than one vote may be cast by a Member for any one nominee) and each position being filled by the nominee receiving the highest number of votes among nominees not already elected to a vacancy).

Each Member may cast one vote to determine the Deputy Chair and one vote per vacancy for the position of Non-Elevated Director).

In the event that two or more nominees (the “Tied Nominees”) receive the same number of votes (being the highest number of votes among nominees not already elected to a vacancy) in an election for the position of Deputy Chair and/or Non-Elevated Director, as applicable, then a second vote will be held. The second vote will be between the Tied Nominees and each Member may cast one vote in respect of the second vote. Should there be a further tie following the second vote, the process will be repeated until there is no longer a tie and the nominee with the highest number of votes shall be elected for the relevant position.

In the event that (i) there is only one nominee for the Deputy Chair position; and/or; (ii) the number of nominees for the Non-Elevated Director positions equals the number of vacancies for the Non-Elevated Director positions, the Chair may determine that the relevant individuals have been selected for the purposes of the Members’ resolution to appoint such individuals as new Directors without using the voting process as set out above.

The existing wording for 8.1 Appointment and Removal of Directors is:

The process for determining the new Directors shall be as follows: (i) first a vote will be held to elect the Deputy Chair from those persons nominated for such position (with the nominee receiving the highest number of votes becoming the Deputy Chair and if that nominee is also nominated for one of the Non-Elevated Director positions that nominee shall not be included in the pool of nominees for the Non-Elevated Director positions); and (ii) then, a vote will then be held to elect the Non-Elevated Directors (with the positions being filled in the order of the nominees receiving the highest number of votes).

Each Member may cast one vote in respect of the vote to determine the Deputy Chair and one vote in respect of the vote to determine each vacancy for the position of Non-Elevated Director. 

In the event that two or more nominees (the “Tied Nominees”) receive the same number of votes (being the highest number of votes) in an election for the position of Deputy Chair and/or Non-Elevated Director, as applicable, then a second vote will be held. The second vote will be between the Tied Nominees and each Member may cast one vote in respect of the second vote. Should there be a further tie following the second vote, the process will be repeated until there is no longer a tie and the nominee with the highest number of votes shall be elected for the relevant position.

If you have any questions please contact Duncan Bonfield at the IFSWF Secretariat:

dbb@ifswf.org

+44 203 906 7322

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