CEOs of 20 leading public companies, pension funds, and investment firms have signed onto “Commonsense Corporate Governance Principles 2.0,” the follow-up to a 2016 effort intended to “jumpstart a national conversation on corporate governance.”

The new, updated document serves as a written commitment by the signatories to build upon a variety of corporate governance best practices within their own organizations.

Included among the list of updated governance principles:

  • Board members should be prepared to serve for a minimum of three years.
  • If board elections are not annual, companies should explain why.
  • Companies and shareholders are encouraged to engage early on important proxy proposals.
  • Companies should allow some form of proxy access.
  • Poison pills and other anti-takeover defenses should be put to a shareholder vote and re-evaluated by the board on a periodic basis.
  • Asset managers should disclose if they rely on proxy advisors to inform their decision making.
  • Asset managers should disclose their conflict-of-interest policies in their proxy voting and shareholder engagement activities.
  • Portfolio managers should be compensated based on performance over an appropriate term, given the strategy and investment time horizon for the portfolio.
  • Asset owners should promote sound, long-term oriented governance in their direct interactions with both companies and asset managers.
  • Asset owners should use benchmarks and performance reports consistent with their investment time horizon to affect governance outcomes with asset managers and evaluate the asset managers’ performance on both investment returns and governance.

Among those signing the Commonsense Principles 2.0 declaration are, thus far: Tim Armour, Capital Group; Mary Barra, General Motors; Edward Breen, DowDuPont; Warren Buffett, Berkshire Hathaway; Jamie Dimon, JPMorgan Chase; Mary Erdoes, J.P. Morgan Asset Management; Larry Fink, BlackRock; Alex Gorsky, Johnson & Johnson; Mark Machin, Canada Pension Plan Investment Board; Lowell McAdam, Verizon Communications; Bill McNabb, Vanguard; Brian Moynihan, Bank of America; Ronald O’Hanley, State Street; James Quincey, Coca-Cola; Ginni Rometty, IBM; Brian Rogers, T. Rowe Price; Charlie Scharf, BNY Mellon; Randall Stephenson, AT&T; David Taylor, Procter & Gamble; Jeff Ubben, ValueAct Capital; and Theresa Whitmarsh, Washington State Investment Board.

Business groups endorsing the principles include the Business Roundtable and Conference Board Governance Center.

“As the operating environment for U.S. public companies continues to evolve, it is more important than ever for corporations, CEOs and boards of directors to adopt and uphold meaningful corporate governance practices,” Joshua Bolten, president and CEO of the Business Roundtable, said in a statement.

An Open Letter outlining the leaders’ thinking about the evolution of the principles, the broader governance conversation and the updated principles accompanied the new pledge of governance principles. “A little more than two years ago, we published the Commonsense Principles of Corporate Governance,” it says. “That work represented a collaborative effort—a search for common ground—by representatives of some of America’s largest corporations and institutional investors. We said then, and it is no less true today, that the long-term prosperity of millions of American workers, retirees and investors depends on the effective governance of our public companies.”

The letter recounts how, in 2016, there was the hope that the Principles “would be part of a larger dialogue about the responsibilities and need for constructive engagement of those companies, their boards and their investors.”

“We think that has been the case,” it says. Other groups have published their own works on the subject. Among them are an investor-led effort by the Investor Stewardship Group called the “Framework for U.S. Stewardship and Governance,” a business-led effort by the Business Roundtable called “Principles of Corporate Governance,” and the International Business Council of the World Economic Forum’s “The New Health Paradigm.”

“As the operating environment for U.S. public companies continues to evolve, it is more important than ever for corporations, CEOs and boards of directors to adopt and uphold meaningful corporate governance practices.”

Joshua Bolten, president and CEO of the Business Roundtable

“We recognize that there is significant variation among our public companies, and that not every principle will be applied in the same fashion, or at all, by every company, board or institutional investor—and the Principles themselves say and allow for precisely that,” the letter says. “But we intend to use them to guide our thinking and would encourage others to do the same.”

Having such a dialogue, the letter adds, is critical.

“In the last 20 years, we have seen a precipitous decline in the number of public companies in our country—a phenomenon that is distinctly and uniquely American,” the participants wrote. “While the reasons for that decline may be complex and varied, one reason cited by a number of commentators is that our country’s public market participants are too short-term oriented, thus discouraging companies with a longer-term view from going public. We need to fix that problem, so that all Americans have the opportunity to participate in the economic growth generated by our country’s innovation and ingenuity.”

The next step: unifying the various frameworks.

“Ultimately, we hope that the many sets of corporate governance principles currently in circulation can be harmonized and consolidated, and reflect the combined views of companies and investors,” the CEOs wrote. “We do worry that dueling or competing principles could impede, rather than promote, healthy corporate governance practices.”