Proxy Topics

Shareholders are assuming a more active voice in the boardroom. Many proxy statements include shareholder proposals that showcase this interest. We have seen proposals for greater activism in such areas as director voting policies, director nomination, compensation, and company policies on sustainability.

With regard to direct communication between shareholders and the board of directors and responses to shareholder concerns, public companies are now expected to have communication procedures that are consistent, clear, and candid and allow for a two-way dialogue. More companies are including policies for shareholder communication on their websites and providing mechanisms for communication through portals, e-mail, interactive webcasts, and the annual meeting.

Boards should coordinate any shareholder communications with management, and most directors prefer for management alone to speak for the company. When communicating with shareholders, boards should consult with counsel to determine that all communications are made within the scope of Regulation Fair Disclosure (Reg. FD). Reg. FD promotes fair and full disclosure and bans disclosure of material, nonpublic information to a select group of individuals or entities.