Mailing madness

In the proxy mailing process few things are as important as accuracy. ‘More than 17 percent of the population moves every year, resulting in 44 mn address changes so maintaining a high level of integrity in your shareholder database can be overwhelming,’ says Tim Kelliher, SVP of sales for DHL Smart & GlobalMail. To achieve a timely delivery, each shareholder address should be certified using the address-matching software known as code accuracy support system (Cass), adds Kelliher: ‘They should even be run through the National Change of Address (NCOA) database. This might incur a nominal fee but, in the long run, it will improve the accuracy of the shareholder addresses and reduce late deliveries or returned mail.’ 

Proxy statement mailing costs, or rather keeping them down, is always a challenge. But some firms and agents increasingly tackle this by bundling their annual report with the proxy material, a technique called householding. For example, a family of five who all individually own stock will get just one annual report, though with five proxy cards and return envelopes. 

Lack of speed can hamper mailing progress, especially in the last leg of the race. Mary Kullman, chief governance officer at Laclede Gas Company in Missouri, says she is all too aware of standard class – previously called third class – mail performance. ‘Some of our materials took more than three weeks to be delivered,’ she recalls. ‘But I centralized the distribution, having ADP distribute materials to our record holders as well as our beneficial holders. This made the process more efficient. I don’t have to worry about the right quantities being delivered to the right entities.’ 

Don’t assume that because last year’s proxy mail-out was successful this year’s will be, too. Robert Durham, president of kcomm Financial Printing Services, a division of DF King, says it’s important to review the mail-out process every year to see how it can be improved. ‘We always encourage people to discuss new trends,’ he explains. ‘What are other people doing that the client could be doing? How can we do it better than last year? What did we learn from last year?’ 

A combined proxy solicitor and financial printing service isn’t always the cheapest option but Durham says there are cost and flexibility benefits. ‘Is the difference between getting a $50,000 bill and getting it done $2,000 cheaper elsewhere that much of a difference? You might save money with some companies but we take full responsibility and streamline the project. We have an interest in making sure everything goes right.’ 

Continuity is important: the fewer companies you have to chase for a progress report, or to go to when something goes wrong, the less stress you are likely to encounter. For instance, if you work with a separate printer it will hand you back the documents when they’re ready. If you have one overall mail fulfillment company, it will deal with the printer and make adjustments if that printer is late. 

Handing over much of the proxy fulfillment process unfortunately does not mean you are off the hook. Anna Marie Pagliaccetti, corporate secretary at eResearch Technology in Philadelphia, says she keeps abreast of SEC pronouncements, for instance, by attending update sessions offered by local law firms. ‘It keeps us up to speed and it means we can note any changes to the proxy early on,’ she explains. 

Expect the unexpected

It’s a good idea to prepare for being hit sideways. Big news, such as a merger or acquisition, could come out of left field; not all corporate secretaries are privy to senior management’s plans. Merger maneuvers in particular, says Bryan Garabo, service director of printing services company RR Donnelley, are when the tricky stuff really starts. ‘There’s been a lot of M&A activity, a lot of divestitures and de-listings,’ he notes. ‘It’s a baptism by fire [if you’re caught unawares]. You need to be organized about who does what, and have a point person to help get the financials as well as someone who knows about the impending legal issues and any clean-up from the previous year.’ 

David Copenhafer from financial print services Bowne urges corporate secretaries not to forget the role of art and design, either – and to get them involved well before your mail-out deadline. For example, what electronic document format – HTML or Ascii – will you use? ‘As time has gone on, European issuers have been quicker to adopt HTML and push the stylistic elements,’ Copenhafer says. ‘More and more US issuers have come around to this and do the primary document in HTML to push their branding competitive position, but it doesn’t mean having everything converted to HTML.’ 

Mike Schlanger, regional vice president of document technology company Merrill Corporation, advises corporate secretaries to focus on the proxy fulfillment responsibilities, and make time or delegate out where necessary. ‘Corporate secretaries are being hit by so many different disclosure issues that they must be able to concentrate on the content and sort out exactly what they’re responsible for,’ Schlanger says. ‘For example, this year the majority of companies will spend additional time and energy on Section 404, which mandates that management assess the effectiveness of the company’s internal control over financial reporting.’ 

Whatever methods you choose to tackle your proxy fulfillment, its success is likely to stand or fall on the quality of communication between everyone on your team, internal and outside – so keep everyone talking.