Major Oil Company Makes Some Corporate Governance Changes

Chevron has announced corporate governance changes to its by-laws before its annual meeting.  Its amended by-laws will now require the position of chairman to be elected annually by the board.  Previously, the Chevron’s chief executive automatically occupied the role of chairman. 

Chevron’s Board also changed voting rules so that a director in an uncontested election “must receive a majority of votes cast in order to prevail.”  In other words, a director who wants to retain his or her seat must receive more “yes” than “no” votes, excluding abstentions.  Under Chevron’s old plurality system, shareholders were only limited to voting either “yes” or withholding their votes.  Now, a current director “who does not receive a majority must offer his or resignation, which would then be considered by the nominating and governance committee” and recommend what action to be taken with respect to the resignation.  However, in contested director elections, the voting standard will still be the old plurality system.