“Both directors and investors also report frustration with the process. More than one-third of directors told us that investors are not well-prepared for the engagement, and we have heard similar sentiments from shareholders,” Malone continues, “Even with all the right intentions, the parties sometimes come away thinking that the meeting was a waste of time.”
While the engagement process with shareholders has changed, the importance of advisors has remained the same, if not increased. Since no party is interested in wasting time or effort, it is the job of the advisor to help make the communication successful.
“Advisors can help management and the directors improve the first building block of engagement, the proxy statement, to ensure that it lays the proper groundwork for a substantive discussion,” says Malone. “With advisors’ input, both sides can work to create a specific agenda to guide the discussions, so all parties know exactly what will be covered.”
By capitalizing on the new trends in communication engagement, advisors can make sure each party involved is operating with efficiency in regards to contribution to the discussion at hand.
“[Advisors] can help ensure that directors participating in the meetings are well informed on the relevant issues, and are “camera ready” in their role representing the board,” says Malone.
She continues, “And advisors can build on the engagement with follow-up: working a description of the meetings into the proxy statement, and making sure that the investors are incorporating the discussion into their decisions on proxy voting and future investments.”
Malone will be featured as a panelist at the Transparency: How to Align Boards, Management and Institutional Shareholders discussion during the Engagement & Communication program on Sept. 7 in New York, NY.