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Improving your proxy statement’s reader experience

Proxy statements have emerged as a key channel for telling a company’s story to shareholders and are a valuable tool for management and Boards. And proxies continue to become more robust – getting longer with more detailed disclosure; and the inclusion of infographics, charts and checklists are making key information more scannable and prominent. 

Content and design improvements are also being made to the shareholder letter, table of contents, company overview, and the proxy summary. Seventy-nine percent of companies included a proxy summary in 2016 (up from 39% in 2012) and 77% used color in their CD&As (up from 48% in 2012) based on Equilar’s 2017 Innovations in Proxy Design study, which examined proxies from the S&P 100. Companies are also increasing their use of CEO and board videos, online annual meetings, and interactive proxy statements.

Even with all the enhancements to proxy statements, it’s important to note that companies are evolving their proxies – it’s not a revolution. Not yet anyway.

Here are a few recommendations based on recent trends and best-in-class examples to  consider as the next proxy season approaches:

Streamline the table of contents.  Starting the proxy statement – a long and potentially intimidating legal document – with an effective table of contents will make it easier to navigate, more engaging and inviting to read. You can also include more detail about what is included in each section. Check out GE’s effective and useful table of contents, which includes a list of frequently requested information.  

Enhance the introductory letters. Be sure to include letters from the Board or Board Chair discussing the important matters of the company and Board, strategy, and how open the Board is to hearing from investors. Prudential included a letter from the Board of Directors covering business strategy and board oversight, and another from the Lead Independent Director that covered matters of corporate governance. 

Incorporate infographics where appropriate. There are several sections within the proxy that lend themselves to interesting graphics and visuals  – anything to improve the scannability will go a long way. Graphics associated with executive compensation, board experience and diversity, and nominee information are some of the more common areas where graphics really help tell the story.  A few notable examples from KimcoFairmount Santrol (client) and Mastercard are featured below. 

Give special attention to key initiatives. Highlighting a company’s key initiatives or business strategy provides clarity and helps to visualize the information for shareholders. Banc of California, Invacare (client) and McDonalds utilize graphics for their current growth strategy and company transformation.  These types of graphics are typically used in other communications (annual report, investor deck, etc.) and can be easily repeated in the proxy.  

Consider creating a digital companion. NASDAQ has reported that “interactive proxy statements are revolutionizing the way companies tell their corporate governance stories.” Although only 11% of S&P 500 companies created interactive proxy materials during 2016, the number appears to have increased significantly in 2017. GE, Visa and Prudential are all worth taking a look at for inspiration.  

Enhancements to your company’s proxy statement present an opportunity to improve engagement with your shareholders. These are just a few of the many ways you can improve the look and feel, content, and overall reader experience of your proxy. For an assessment of your company’s proxy, email me or call me at 216.241.4622.

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