by Lisa Rose

June 24, 2015

Last week’s NIRI annual conference in Chicago was full of great learning and networking opportunities as well as insights into the latest technologies for the world of investor relations. During my time at the conference, I had the opportunity to participate in a really interesting session featuring three corporate governance professionals representing institutional investment firms TIAA CREF, Northern Trust and T. Rowe Price.

At Dix & Eaton, we’ve always believed there is value in meeting with the corporate governance professionals responsible for making proxy voting decisions for your investors – in addition to the portfolio manager making the investment decisions.  This discussion reinforced our view and belief that the trend of corporate governance roadshows will continue to accelerate. Here are a few of the key takeaways from the session:

1. Be very selective when including board members in these meetings. 

Surprisingly, one of the corporate governance panelists said that, when meeting with board members, she lost confidence in the company 55 percent of the time.  While we recommend you still consider asking for board participation in these meetings, this underscores the need to carefully select a representative who is well-prepared, a good spokesperson and an advocate for the company and its strategy.

2. If you’re taking action such as nominating a new independent chair or lead director, you are certain to have the investors’ attention. 

These are issues that corporate governance professionals are very interested in discussing in person.  Come prepared to share your perspective and business rationale for management and board decisions. This strategy is more effective than coming in with the attitude that “we are going to explain our issue to you and why you should vote in favor of our board and management.”

3. Not all meetings must be in person. 

Clearly, more and more companies are reaching out to the corporate governance professionals who are responsible for voting or recommending how to vote on company proxy issues.  And while in-person meetings are crucial for some topics (see #2 above), there are others where a phone conversation can be just as effective. Regardless of the meeting format, it is important for management to be prepared, make efficient use of the time and share an agenda in advance of the session.

4. Include a business overview in your proxy statement. 

While most companies have substantial content in their earnings releases and Form 10K filings, including an overview of performance for the year, the proxy statement typically goes right to the heart of the issues to be voted on and misses out on the opportunity to provide perspective on performance.  Including an overview of company performance in your proxy is one more way to ensure that your investors are hearing your story.

5. Advisory votes matter. 

If your company loses an advisory vote and does not make the necessary changes, don’t be surprised when investors take an even stronger stance and withhold their votes the following year.

As companies increasingly share information with corporate governance professionals, it’s important to understand how to make the most of these meetings and to build relationships in a way that fosters transparency and credibility.

What are you doing to drive the dialogue with this important audience?