Board-Shareholder Engagement Practices: Findings from a Survey of Sec-Registered Companies
Director Notes, December 2019
44 Pages Posted: 8 Jan 2020
Date Written: December 13, 2019
Shareholder engagement is increasingly being added to the job description of the corporate director. The phenomenon is the natural evolution of the changes to the corporate governance landscape that have occurred during the last two decades. First, there is the expansion of the board’s oversight responsibilities that resulted from the Sarbanes-Oxley and Dodd-Frank legislations. Second, there is the progress made by the shareholder rights movement, with investors’ claim for a more direct involvement in business decision-making.
This Director Notes analyzes and documents emerging practices in the role of the board of directors in the corporate-shareholder engagement process. It is based on a 2018 survey of corporate secretaries, general counsel and investor relations officers at SEC-registered public companies conducted by The Conference Board and Rutgers University’s Center for Corporate Law and Governance (CCLG).
It has long been customary for public companies to interact with their shareholders, on earnings calls and at annual general meetings (AGMs). These traditional forums of communications are periodically convened to apprise investors of financial results, material organizational decisions, and key strategic choices. However, they seldom actively involve shareholders’ main fiduciaries — the members of the board of directors.
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