Board Moves: Poor Meeting Attendance Hits Election Result

Missing one regular in-person board meeting and two telephone audit committee meetings was enough to drive Eric Rose’s attendance on the Abiomed board down to 70%. Prior to 2018, Rose, a heart surgeon and researcher, had attended all board and audit committee meetings since he joined the board in 2014. However, his difficult 2018 schedule and lackluster attendance led to a “withhold” recommendation from a proxy advisory firm, and Rose didn’t receive majority support at the company’s annual meeting in August as a result. He tendered his resignation, and this week, the Abiomed board unanimously rejected it.

Rose is the latest in a line of “zombies” — directors who remain on boards despite not receiving majority shareholder support — and follows a trend that investors are disturbed to see increasing, as Agenda has reported.

According to an intelligence report on director attendance from MyLogIQ, average attendance among S&P 500 boards in 2017 was 79%. That figure includes attendance at an average of eight regular board meetings, three telephone meetings, four special meetings and three actions by written consent. Abiomed’s average attendance however, hits below that figure at 75%. That threshold is the one that can trigger a proxy advisory firm to recommend that investors withhold support from a director, particularly in the absence of disclosure explaining the low attendance.