A recent report by MSCI examined proxy access among the 565 United States incorporated companies in the MSCI USA Index. In two years, the percentage of companies with proxy access grew from less than 1 percent to 41.2 percent as of December 14, 2016. Additionally, of the 110 companies targeted by the New York City Comptroller’s Office and the New York City pension funds’ Boardroom Accountability Project during the 2015 and 2016 proxy seasons, 90.9 percent have adopted proxy access. Although these numbers show a substantial increase in adoption by companies, making the push for proxy access appear successful, the report notes that the companies adopting proxy access are mostly ones that already have fairly strong shareholder rights.

When looking at the 134 companies in the index with boards that MSCI considers “entrenched” (boards with a significant number of directors over 70 years old and/or directors having tenure of more than 15 years), the report found that only 27.6 percent had adopted proxy access, compared to 45.5 percent of the companies without such boards. Companies with a significant number of long-tenured and aging directors were also less likely to have other shareholder rights, including majority voting for director elections, annual reelection of directors, shareholder removal of directors by a majority vote and the right to call a shareholder meeting.

These numbers show that proxy access campaigns, while having shown significant growth and momentum in a short period of time, when viewed in context, may not be as successful as previously believed. Given the continued focus on proxy access, companies with several long-tenured and aging directors may find themselves becoming the targets of future shareholder campaigns. However, because many such companies are also likely to have controlling or principal shareholders or to be family-dominated firms or firms with a founder sitting on the board, getting them to adopt proxy access will likely pose a challenge for shareholders. Notwithstanding this potential difficulty, as proxy access and other shareholder rights become more widespread among U.S. corporations, companies with long-tenured and aging boards may face increasing pressure to adopt such measures.