Communication engagement is an ever-changing process in the global marketplace, ergo new trends are constantly affecting an advisor’s strategy in aligning boards, management and institutional shareholders.
Leah Malone, director at PricewaterCoopers’s Governance Insight center, comments on the change in engagement, addressing communication breakdowns between boards and shareholders and the importance of and advisor’s role in the engagement process.
“Shareholder engagement today is fundamentally different than it was five or ten years ago,” says Malone. “More and more public company directors are engaging directly with the company’s shareholders, and digging into issues well beyond economic performance, including executive pay, company strategy and risk.”
As director, Malone is responsible for advising board and committees members on governance-related issues. She contributes thought leadership on focused topics such as executive pay, proxy access, shareholder engagement and board composition.
“When PwC asked directors about this direct engagement in our Annual Corporate Directors Survey, more than three-quarters said that the discussions give the board valuable insights,” says Malone.
Keeping an open line of communication is essential in corporate progression, and direct engagement allows for many concerns and questions to be addressed in a new way.
“[Directors] learn about their shareholders’ biggest concerns, and have a chance to talk about the company in a new way. It is also beneficial for shareholders, who can express hear directors’ perspectives, gain insight into the company’s strategic plan and test out the rigor of the board’s oversight,” Malone explains.
However, the communication engagement cannot effectively take place if one side is not prepared for the meeting.