There has been a rapid increase in shareholder requests for special meetings with the board. This report discusses the potential benefits and complexities of the board-shareholder engagement process, reviews global trends in engagement practices, provides insights into engagement activities at U.S. companies, and highlights developments in the use of technology to facilitate engagement. It also provides perspectives from institutional investors on the design of an effective engagement process.
The annual general meeting is the main channel of communication between a company’s board and its shareholders. Among other important meeting activities, shareholders have the opportunity to hear executives and directors discuss recent performance and outline the company’s long-term strategy.
Since 2007, there has been an increase in shareholder requests for special meetings with the board. A recent study of board-shareholder engagement activities shows that 87 percent of security issuers, 70 percent of asset managers, and 62 percent of asset owners reported at least one engagement in the previous year. Moreover, the level of engagement is increasing rapidly, with 50 percent of issuers, 64 percent of asset managers, and 53 percent of asset owners reporting that they were engaging more. Only 6 percent of issuers and almost no investors reported a decrease in engagement. Shareholders, particularly institutional investors, believe that annual meetings are too infrequent and do not provide sufficient content to address their concerns.
…continue reading: Global Trends in Board-Shareholder Engagement