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As Shareholder Meeting Season comes to a close, focus shifts to Shareholder Engagement Season.
Shareholder meetings are landmark events for North American listed companies, but executives need to engage shareholders throughout the year. Michael Vogele, Managing Director of the global advisory group at Alliance Advisors, explores.
The 2024 shareholder meeting season is in full swing, but companies across the US already need to be conscious about what comes next, Shareholder Engagement season. There are plenty of tactics here, and expertly executing shareholder engagement requires the assistance of an advisor with deep knowledge of the shareholder meeting and institutional investor landscape. Mandated by voting records of registered funds, giving issuers insight into how investors voted at their shareholder meeting.
“To truly understand investors’ motivations, companies should directly engage with them during the “off-season.”
Investors signal their expectations for public companies through their proxy voting policies, which are publicly available and updated once a year. These proxy voting guidelines offer a sense of potential issues for shareholder meetings. Sifting through the paperwork can certainly secure valuable insights – a recent study by Deloitte and Tufts University found that 83% of professional policies – the sheer breadth of shareholder pressure points require a more holistic approach, ultimately one that involves year-long engagement because
there are countless issues for which investors apply case-by-case analyses and speaking directly with the investor can shed light on how they may vote on a particularly nuanced matter.
A range of challenges
The scale of the challenges facing US corporate leaders is clear from the numbers and it is imperative that issuers understand key stakeholders’ evolving expectations. Consider for example, the rising importance of cybersecurity. With new SEC rules obliging companies to disclose serious incidents, a full 71% of US investors now see cyber as a major threat.
And if that’s echoed by the reaction of corporate leaders – PwC reports that 88% of American companies are considering sharpening their cyber risk policies – there are plenty of other worries too.
As the Deloitte survey implies, ESG is one, though in practice that spans the gamut from board diversity to practical action on climate change. A second involves corporate pay, while third involves AI: at Apple’s AGM in February, 37.5% of shareholders voted for a motion demanding the company clarify how it uses the technology.
Given these competing priorities, how should executives react? SEC forms and policy documents are a good start. But to truly get to grips with what shareholders want, companies can’t
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