Shareholder and Proxy Advisor Outreach
The Board continues to place a high priority on listening to and considering the views of our shareholders. We accomplish this through a robust outreach and engagement program. We believe that a comprehensive shareholder outreach program is an essential component of maintaining our strong corporate governance practices. We regularly communicate with a large portion of shareholders throughout the year. We also have a formal process of outreach to our top shareholders prior to our annual meeting to address highlights or changes to our corporate governance practices, including discussion of our executive compensation programs. The results of these conversations are summarized and discussed with both the SCI Board and our management. As part of our normal procedures, we also engage with proxy advisors who represent the interests of certain shareholders. We continue to have open dialogue with Glass Lewis and Institutional Shareholder Services and use their constructive feedback to continuously enhance our disclosures.
In early 2019, we engaged with shareholders representing approximately 55% of the Company’s common stock prior to our Annual Shareholder Meeting. Overall, investors’ sentiment was positive with respect to our enhanced ESG disclosures, our corporate governance practices, and our executive compensation programs. Investors expressed appreciation for our enhanced Board composition as a result of the addition of four new candidates and five vacancies since 2012. However, an area of particular focus during our engagements with investors was Board tenure and the recruitment process for new Director candidates. In recruiting new candidates, the Board recognizes that diverse individuals from different backgrounds with varying perspectives, professional experience, education and skills are important features of a well-functioning board. The Board recruitment process starts with the desired skills we value in a board member, while also considering the value that diversity can add to the Board's skill set. Through our ongoing shareholder outreach efforts, we better understand the viewpoints of our shareholders as well as gain opportunities to communicate with transparency how our decisions align with our business goals.
Updates for 2020
*Please see the section titled "Consideration of Director Nominees" page 25 in this Proxy Statement for more information on the Board recruitment process.
Adoption of Best Practices and
Board Composition Changes
We have a history of thoughtful consideration of shareholder feedback and monitoring corporate governance best practices. The timeline below demonstrates our governance enhancements with respect to Board structure, shareholder rights, and executive compensation beginning with CEO Tom Ryan's promotion to Chairman in 2016 (prior to his promotion in 2016, Marcus Watts and Ellen Ochoa were elected to the Board in 2012 and 2015, respectively). We also remain continually focused on Board composition and committed to evaluating our disclosures to promote transparency.
Created role of Lead Independent Director with enhanced authority to call special Board meetings and to preside over Board Meetings in the absence of the chairman
Refreshed proxy statement to improve readability and enhance disclosures, including skills and experiences of Directors
Appointed CEO Thomas Ryan as Chairman of the Board
Appointed Tony Coelho as Lead Independent Director
Board member Dr. Malcolm Gillis passed away (October 2015) after serving on the Board for 11 years
Adjusted Director compensation based on feedback from advisory firms
The Board, in response to shareholder feedback, approved changes to the performance unit plan to add a normalized return on equity modifier to the total shareholder return metric and changed the award denomination to share units rather than cash beginning in 2018
Shareholders are allowed to call special meetings
Board recommended and shareholders approved the de-classification of our Board of Directors
Board recommended and shareholders approved elimination and reduction of certain supermajority voting requirements in our Articles of Incorporation and Bylaws
We eliminated the Umbrella Plan due to certain changes in the Tax Act
Added diverse perspectives and experience to our Board with the addition of Sara Martinez Tucker and Jakki Haussler to our Board
After 56 years of meaningful contributions, in order to recruit the next generation of Board leaders, R.L. Waltrip decided not to seek re-election
Long-time member, Dr. Ed Williams, passed away after faithfully serving on the Board for 27 years
We have enhanced our disclosures around Environmental, Social, and Governance (ESG)
The Board made changes to the Company's Bylaws to permit the Chair of the Nominating and Corporate Governance Committee of the Board to preside over the Board meetings in the absence of the Board Chair, Lead Director and the Chief Executive Officer
After 36 years of outstanding service on the Board of Directors, John Mecom decided to not seek another term as a Board member
The charter of the Nominating and Corporate Governance Committee of the Board was updated to reflect their oversight responsibilities of ESG
Our best practices include:
- Majority voting standard in Director elections
- Annual Board and Committee evaluation process
- Board orientation and education program
- No shareholder rights plan or “poison pill”
- Shareholder (10%) ability to call special meetings
- Anti-hedging and anti-pledging policies applicable to all Directors and Officers
- Stock ownership and retention guidelines for Directors and Officers
Environmental, Social, and Governance Practices (ESG)
Workforce and Diversity
We understand our associates are one of our greatest assets. Increased diversity enables solid business decisions, considering different points of view, and relevancy with our customers.
In 2018, we held our first Women's Leadership Conference, expanded our inclusive leadership training, and began establishing metrics to track trends and progress for inclusion and diversity. We planned to hold a second Women’s Leadership Conference in May 2020; however, health and safety concerns arising from the spread of COVID-19 forced a delay. We are committed to holding the Women’s Leadership Conference at a time when the threat to the wellbeing of our associates has been alleviated.
For a third consecutive year, SCI was certified as a Great Place to Work. This certification increases awareness of our Company culture and builds visibility of our Company values to our stakeholders.
Tom Ryan, our President, CEO, and Chairman, joined the CEO Action for Diversity & Inclusion™, and has pledged to continue to act on supporting a more diverse and inclusive workplace. See Our People. Our Purpose report under the "Our People" page on our corporate website for more information.
Jakki L. Haussler and Sara Martinez Tucker were recently elected to the SCI Board of Directors. Both members bring unique perspectives and diversity to the Board.
- We now have a Supplier Code of Conduct that is available on the Company's website: https://www.sci-corp.com/about/responsibility/sustainability. This policy ensures our suppliers reinforce safe working conditions and their associates are treated fairly and with respect.
- We recognize reclaiming water for reuse applications instead of using freshwater supplies can be a water-saving measure. We are surveying our cemeteries to ensure we are optimizing water usage and testing water conservation technologies at certain of our cemeteries.
- We are taking action to ensure our supplier diversity policy reflects the Company values. SCI already procures from a very large pool of small and diverse suppliers; however, we are improving this by fostering an inclusive procurement process providing an opportunity for the participation of small and diverse businesses as partners and suppliers of goods and services.
Data Privacy and Security
- We are committed to protecting the privacy of our clients and website visitors in a manner that would be expected of a company of our size. We value our relationships with existing and prospective clients and recognize an essential element of those relationships is the trust and confidence of the families we serve. In January 2020, we successfully implemented strategies to comply with the California Consumer Privacy Act.
- Through the Dignity Memorial® Public Servants Program, Dignity Memorial funeral, cremation, and cemetery providers offer dignified and honorable tributes, at no cost, for career and volunteer law enforcement officers, firefighters, and emergency services personnel who fall in the line of duty.
- Dignity Memorial® funeral, cremation, and cemetery service providers are honored to administer the Dignity Memorial Homeless Veterans Burial Program across the nation. The U.S. Department of Veterans Affairs provides eligible veterans with opening and closing of the gravesite, a grave liner, a headstone or marker, a graveside ceremony, and burial in a National Cemetery. Participating Dignity Memorial funeral directors provide funeral services, transportation, preparation, clothing, and a casket at no charge to eligible homeless or indigent veterans.
- For the past several years, we have participated in Donate Life's annual tribute to organ, eye, and tissue donors. We also have helped many client families honor their loved ones with a portrait featured on the Donate Life float in the annual Rose Parade® held every New Year's Day in Pasadena, California.
- In addition to compassionately serving families during their time of need, our team of professionals demonstrate an ongoing commitment to our communities. Please visit our Corporate Social Responsibility page for further information: https://www.sci-corp.com/about/responsibility