Public companies are always under pressure to communicate their strategy and vision to shareholders – not just during proxy season. But this time of year naturally brings added attention to the relationship between companies and their investors, as well as the need to present a compelling and convincing case to proxy advisory firms.
The fact is, proxy season is too busy a time and too late in the game to start thinking about these discussions, which need to be thoughtful, well-prepared and ongoing. And 2014 is already shaping up to be an exceptionally active proxy season. For one thing, companies whose shareholders approved a triennial say-on-pay vote back in 2011 will be facing that same vote again this year. As a result, experts are predicting investors and proxy advisory firms will be stretched more than ever, and getting an audience with them will be next to impossible.
As is typical this time of year, there is an abundance of interesting and thoughtful writing on hot topics for those who want to stay informed on shareholders’ thinking and for those who anticipate a possible proxy challenge. Some of my favorites include The Conference Board’s list of what should be on the minds of boards of directors in 2014; Harvard Law School’s blog on the evolving direction and increasing influence of shareholder activism; and a recent Wall Street Journal article on companies and activists declaring a truce in boardroom battles.
In addition, I heard a number of excellent ideas this week from law firm Latham & Watkins and proxy solicitation firm Georgeson in their fifth annual webinar, “2014 Proxy Season: What you should know as you draft your proxy statement and prepare for your annual meeting.” In future blog posts, I’ll cover some of those ideas as well as examples of the innovative ways some companies are combining disclosure requirements with effective storytelling to keep their messages front and center with shareholders during proxy season and year-round.