Healthy attitude

UnitedHealth’s annual meetings have been sedate in recent years compared with those of some other companies. Why? Most public companies have an extensive shareholder communication program, but the emphasis is on investor relations and business performance. Minneapolis-based healthcare company UnitedHealth has added a third element: corporate governance.

‘Our shareholders don’t feel that in order to be heard they need to come to our annual meeting and make a statement there,’ explains Dannette Smith, secretary to the board and deputy general counsel. ‘They know if they want to have a serious discussion with us on a corporate governance matter, we’re willing to do that.’

Part of the reason UnitedHealth topped the table in this category is its unique shareholder advisory committee, which stays in regular contact with Smith and members of the board, and facilitates communication between the board and its investors. The Corporate Secretary Magazine Awards judges called UnitedHealth’s corporate governance communications program ‘one of the most robust shareholder communications plans in the business’, and cited several elements that make the company ‘a standout selection in the eyes of the judges.’

Praiseworthy elements include active solicitation of shareholders regarding nominees to the board of directors and allowing shareholders to directly question heads of each standing committee during the annual meeting. The judges were also impressed by ‘the increased readability of the annual report and proxy statement and the transparent discussion of the company’s governance practices’.

Smith says the company decided to launch an aggressive ‘parallel’ shareholder communication program on corporate governance at the end of 2006, when it voted to add new directors to the board. Both actions followed an embarrassing options backdating scandal that strained relations with some investors and led to reams of negative publicity.

‘Our board believes it can do its best job for the company and the shareholders when it has a lot of information available, and shareholder views on corporate governance topics are one of the pieces of information it believes helps it do its job better,’ Smith says. ‘The shareholder advisory committee has done wonders for shareholder relations. Our large shareholders understand our positions and understand that the board comprehends what matters to them.

‘If you look at the current climate, there’s a great deal of interest in board communications, particularly coming out of the financial crisis, and I think our board has really embraced that. Our relationship with shareholders has truly benefited as a result.’