The opinions expressed here are those of the author, a correspondent for Reuters. This column is part of the weekly Reuters Sustainable Finance newsletter, which you can sign up for here https://www.reuters.com/newsletters/reuters-sustainable-finance/

By Ross Kerber

July 30 (Reuters) - Despite a tough year for shareholder resolutions, many corporate governance reforms continued to get traction.

At annual meetings for U.S. public corporations, reform proposals targeting governance issues like voting rights or political contributions - the "G" part of the ESG acronym - won 33.9% support on average for the 12 months ended June 30. That was close to their support rate from a year earlier and higher than in 2023, according to Morningstar.

In contrast, average support for resolutions on environmental and social themes fell to 15.7%, about half the rate of three years ago. Out of 231 governance resolutions voted on at U.S. companies this year, 46 won the support of a majority of voted shares.

Proponents and analysts said the figures indicate many investors agree on principles like equal shareholder voting rights or annual director elections, concepts that are more studied and developed than matters like how companies should account for their carbon emissions.

Reformers "have increasingly targeted shareholder rights-focused topics, and the governance guidelines at major asset managers tend to support those sorts of sentiments even if a firm may not always agree to support individual shareholder resolutions," said Lindsey Stewart, Morningstar Director of Institutional Insights.

For instance, a set of resolutions calling on companies to disclose details about their contributions to political candidates or campaigns won an average of 42% support this year, up from 28% on average last year. That is according to the nonprofit advocacy group that authored them, the Center for Political Accountability. Those votes included majorities at five companies led by homebuilder Meritage Homes, MTH.N where the item won support of 58% of votes cast.

Center for Political Accountability President Bruce Freed said the resolutions did well because investors worry companies could be bound up in political controversies and want to track where their money is going. "If you're going to give, you have to have robust disclosures and oversight," Freed said.

A Meritage representative did not respond to messages.

In a securities filing, the company had urged investors to vote against the proposal. Among other things, it said that "In the current political climate, specific unilateral disclosure of political spending could hurt the Company. The requested additional disclosure could place the Company at a competitive disadvantage by revealing strategies and priorities designed to protect the economic future of the Company and its stockholders while other similar companies may not be subject to the same required disclosure."

HARDLY ALL WINS

To be sure, most governance-related resolutions won less than 50% support, and most are only advisory. At Starbucks SBUX.N in March, just 15% of votes cast supported a call for the company's board chair to be independent.

Currently the board is chaired by CEO Brian Niccol, a situation proponents including New York State Comptroller Thomas DiNapoli wrote "concentrates too much oversight in one person and hinders the Board’s independent oversight." Asked about the result, a representative for DiNapoli said that "a sizeable number of shareholders supported our proposal and clearly share concerns about this issue."

A major investor, BlackRock, BLK.N said its funds voted against the item at Starbucks' March 12 meeting, citing how the company also has a lead director "who fulfills the requirements appropriate to such role."

Starbucks representatives did not immediately comment on the result. The company had opposed the change, noting its lead director and concern it not be forced "to adopt an inflexible approach to future board leadership."

Still, there is a message from the resolutions that did well, such as one calling on Charles Schwab SCHW.N to have all directors elected annually, which won support from 84% of votes cast.

Schwab had opposed the change, noting that in 2022 the company itself had proposed such a shift but failed to reach the needed threshold of 80% of all outstanding shares.

One of the resolution's backers, private investor Jim McRitchie, said a reason governance resolutions did better than climate or social measures because there is general agreement among some investors that changes like ending dual-class shareholder structures or classified boards are useful.

"Many governance issues are relatively settled," McRitchie said via e-mail.

A Schwab representative said via e-mail that by next proxy season, "the Board will review the results of the stockholder proposal and determine how to respond at the 2026 annual stockholder meeting."

(Reporting by Ross Kerber in Boston; Editing by David Gregorio)

((ross.kerber@thomsonreuters.com; (617) 412 0093;))