Voting Guidance Engine – FAQ

What is Boardroom Alpha's Voting Guidance Engine?

The Voting Guidance Engine is Boardroom Alpha’s decision-support tool that helps investors, proxy voters, and governance professionals evaluate director elections with a consistent, data-driven framework. It provides recommendations for or against directors based on customizable models that weigh governance, performance, and risk factors.

How does the Voting Guidance Engine work?

• Customizable Models: Users can select or build models that apply different weights to governance and performance criteria.
• Scoring Framework: Each director receives an overall score based on weighted inputs such as:
  • Activist risk exposure
  • Role quality and tenure
  • Pay-for-performance alignment
  • Overboarding concerns
  • TSR (total shareholder return) performance versus peers and the broader market
  • Board structure risks (classified boards, entrenched boards, multi-class shares, CEO/Chair separation, etc.)
• Recommendation Output: Scores translate into clear voting guidance (e.g., FOR with watch) that balances governance red flags, activist pressures, and company performance.

Why is the Voting Guidance Engine being adopted by market participants?

• Consistency & Transparency: Creates a clear, explainable methodology for evaluating directors.
• Flexibility: Investors can adjust weightings and components to reflect their own voting policies.
• Risk Awareness: Surfaces governance and performance red flags that may otherwise be overlooked.
• Comparability: Standardizes assessments across companies and directors.
• Efficiency: Automates complex governance analysis, making proxy season decisions faster and easier to defend.

Who uses the Voting Guidance Engine?

• Institutional Investors & Asset Managers: To support proxy voting policies and stewardship reporting.
• Proxy Advisors & Governance Teams: To ensure consistent voting recommendations.
• Corporates & Boards: To understand how external stakeholders may evaluate their directors.
• Advisors & Legal Teams: To benchmark governance risk in activist or contested situations.

Understanding Vote Guidance Recommendations

This section explains the different types of voting recommendations generated by the Voting Guidance Engine. Each outcome—ranging from FOR to AGAINST (with watch)—reflects a director’s governance and performance profile, helping users interpret results consistently and apply them within their voting or stewardship framework.

What does “FOR” mean?

A “FOR” recommendation indicates that a director meets the criteria of the selected model and has no significant governance or performance concerns. The director aligns with best practices and performance expectations, making them a clear candidate for support.

What does “FOR (with watch)” mean?

A “FOR (with watch)” recommendation indicates that a director generally meets the criteria for support but has specific areas of concern that warrant monitoring. These could include average TSR performance, potential overboarding risks, or governance structures that are acceptable now but may become problematic if not addressed.

What does “AGAINST” mean?

An “AGAINST” recommendation signals that a director fails to meet critical governance or performance thresholds in the model. This may include:

• Poor alignment between pay and performance
• Repeated underperformance versus peers and the market
• Governance red flags (e.g., entrenched boards, lack of independence, dual CEO/Chair roles, excessive overboarding)

Voting “AGAINST” indicates a belief that shareholder interests would be better served by holding the director accountable or supporting board refreshment.

What does “AGAINST (with watch)” mean?

An “AGAINST (with watch)” recommendation indicates that a director currently falls short of key governance or performance expectations, warranting a vote against. However, the “with watch” flag highlights that there are mitigating factors or signs of potential improvement. For example:

• TSR underperformance may be improving with recent momentum.
• Governance red flags (e.g., overboarding, entrenchment) may be trending toward resolution.
• Activist risk may remain high but is being addressed by board or management actions.

This recommendation signals accountability is necessary now, but also that the director’s profile should be monitored for potential re-evaluation in future votes.

Commonly Asked Questions

Can I create my own model?

Yes. The engine allows users to design and save custom models by assigning weights to components that matter most (e.g., TSR performance, board independence, DEI considerations, or activist risk)

Can I adjust the weightings of components?

Yes. Each component can be weighted individually, giving you complete flexibility to reflect your policy or stewardship priorities.

Are there pre-built models I can use?

Absolutely. Boardroom Alpha offers several pre-configured models (e.g., BA 2025, Vanguard 2025, Growth 2025, TSR Big Time) that represent different governance perspectives. These can be used directly or customized further.

How often are scores and recommendations updated?

Scores are updated continuously to reflect the latest governance, performance, and market data—ensuring recommendations stay current with director moves, company performance, and new risk signals.

Can I export the results?

Yes. Voting guidance outputs can be exported (e.g., JSON) for integration into internal workflows, reporting systems, or stewardship documents.

What do the assessments mean (e.g., “High Risk,” “Mid Performer”)?

Assessments provide quick context for each component:

• High Risk = Elevated governance or performance concern
• Mid Performer = Mixed or average track record
• Top Performer = Strong alignment with best practices

Does the engine cover all U.S. public company directors?

Yes. The Voting Guidance Engine leverages Boardroom Alpha’s comprehensive dataset, covering every U.S. public company director and officer with continuously refreshed information.

How do recommendations handle activist situations?

The model incorporates an Activist Risk Score that highlights whether a company is vulnerable to activist pressure. This ensures activist risk is factored into voting decisions, especially in contested or high-profile elections.

Can the Voting Guidance Engine be used for stewardship reporting?

Yes. Because the methodology is transparent and customizable, outputs can be directly mapped to your policy framework, making it easier to explain and defend voting decisions in stewardship and engagement reports.

Is it possible to compare directors across companies?

Yes. Since every director is scored using the same framework, users can compare governance quality and performance across companies, sectors, or peer groups.