Bank of America's year-round holistic shareholder engagement

At Bank of America, shareholder engagement is well established and supported across the executive and non-executive teams. For many governance teams, engagement is now a year-round activity, and it therefore helps to have such a broad team involved, including the company’s vice chair, chief human resources officer, global general counsel, head of investor relations, global ESG executive and corporate secretary.

In addition, the company benefits from robust participation from its lead independent director, Jack Bovender, who is slated to retire from Bank of America’s board of directors in April 2021; his successor as lead independent director will be Lionel Nowell. Bovender’s commitment to shareholder engagement was even called out in the press release announcing his retirement from Bank of America’s board.

‘Jack has worked tirelessly to build a forum for key stakeholders to share their views with management, and we look forward to continuing the industry-leading shareholder engagement activities he helped to put in place,’ said Bank of America’s chairman and chief executive officer Brian Moynihan in the media release.

In the 12 months leading up to Bank of America’s 2020 annual meeting, Bovender participated in 46 meetings with large shareholders and key stakeholders, according to the firm’s nomination materials. The bank is keen to maintain consistent lines of communication with its institutional shareholders – so much so that it regularly sends email updates to its top 250 shareholders, when there’s news such as new director appointments.

Beyond this, the bank’s governance team contacts its largest shareholders and key stakeholders via email, phone and, prior to the Covid-19 pandemic, in-person meetings, multiple times during the year. In total, the governance team regularly connects with investors representing more than 61 percent of shares outstanding. This amounts to 61 in-person and telephone meetings with approximately 45 shareholders, according to Bank of America’s proxy statement.

For plenty of governance teams across the US, that would represent a robust and successful shareholder engagement campaign. But Bank of America worked hard this year to ensure it was keeping its retail shareholders up to date, engaged and, ultimately, participating in the annual shareholders meeting.

This started with the development of additional resources for the bank’s dedicated retail shareholder annual meeting web page, which included videos from the board of directors, the 2019 human capital management report and other interactive information. This web page became a hub for updates on the nature of Bank of America’s annual meeting, as it transitioned from an in-person event to a virtual one, according to the bank’s nomination materials.

Retail investors are more likely to vote in support of management during contested resolutions, and the massive rise in first-time retail investors this year could prompt governance and investor relations teams to think about how they more tangibly encourage retail participation in the annual meeting. For Bank of America, one of the many ways its governance team aims to drive participation is through donations on behalf of each shareholder account that votes. In 2020, the bank donated more than $1 million to Water.org, representing a 5 percent increase in the number of accounts voted in 2019, according to the company’s nomination materials.

Of course, shareholder engagement in itself sends a strong message to investors that a company’s management team and board are committed to a continued dialogue with shareholders. But it also creates the expectation that shareholder feedback will be taken into account and, where applicable, acted on.

Some recent examples of measures Bank of America has undertaken – based on shareholder feedback – include expanding corporate disclosures on workplace diversity and equal pay for equal work, enhancing ESG disclosures and co-operating with SASB and the Task Force on Climate-related Financial Disclosures, actively considering board succession planning and refreshment, and expanding disclosures on political activities and public policy engagements.

You can read more about the Corporate Governance Awards in the Corporate Secretary Yearbook