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10 February 2020
In this article, representatives of The Conference Board and Rutgers Law School discuss the current phenomenon of director engagement with shareholders. While company managements have long engaged with shareholders at annual meetings and investor presentations, the notion of director engagement with shareholders is a more recent development. Why is shareholder engagement increasingly being added to the job description of the corporate director? The article posits several theories for the trend and, based on a survey of corporate secretaries, general counsel and investor relations officers at public companies, identifies the most common engagement topics, provides data on frequency of engagement and highlights emerging practices related to director engagement.
The authors finds the roots of the phenomenon in the enhancements to corporate governance arising out of SOX and Dodd-Frank, together with the demands of the so-called "shareholder rights movement," as a result of which shareholders have increasingly expected direct access to board members. More specifically, the authors attribute the shift toward director engagement to three key factors:
The authors identified the following as key insights from the 2018 study conducted by The Conference Board and Rutgers University's Center for Corporate Law and Governance:
The authors identified as the most common topics for board-shareholder engagement:
More common among larger companies, especially in the financial sector, these policies tend to cover:
Frequency of engagement
Duration of engagement
Leadership of engagement process
Engagement outcome and disclosure
Impediments to engagement
For further information on this topic please contact Cydney Posner at Cooley LLP by telephone (+1 415 693 2000) or email (firstname.lastname@example.org). The Cooley LLP website can be accessed at www.cooley.com.
This article has been reproduced in its original format from Lexology – www.Lexology.com.
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