Almost half of companies are putting more resources toward their governance work preparing for proxy season, with very few dialing back, according to a new online poll from Governance Intelligence.
In recent years, the governance work done in preparation for shareholder meetings has come into greater focus among investors and other stakeholders. That work ranges from shareholder engagement and writing the proxy statement to planning the AGM itself.
The increasing attention has arisen in part due to the growing numbers of ESG-related shareholder proposals as well as high-profile shareholder activism campaigns at companies such as The Walt Disney Company and the advent of the universal proxy.
Governance Intelligence’s new poll suggests that, on balance, the greater attention paid to companies around proxy season is having an impact on the amount of time, money and personnel they devote to getting ready.
A combined 46 percent of respondents taking part in the poll say the overall level of resources their in-house legal/governance team spends preparing for the proxy season has seen a slight or large increase over the past two years. That compares with just 5 percent who have seen a slight decrease in resources and none who have seen a large decrease over that period.
A combined 42 percent report a slight or large increase in the overall level of resources their in-house legal/governance team spent preparing for this proxy season compared with last year’s. Just 3 percent report a slight drop and none report a large decrease.
The poll features responses from 119 governance professionals, primarily based in the US and Europe.
Proxy statements
Arguably the most important element of preparing for proxy season is the proxy statement itself. The document has evolved in recent years from being a simple, text-only filing designed simply to comply with regulatory requirements into a key means of communicating with investors and other stakeholders. It now includes new areas of disclosure conveyed in part through more imagery and graphics in an effort to provide transparency into companies and convey their narrative.
Governance Intelligence’s recent Governance Playbook: How to make your company’s proxy statement a success provides actionable advice from leading experts on their work creating those documents.
Over the past two years, half of respondents in the new poll say the resources spent by their in-house legal/governance team preparing the company’s proxy statement has seen a slight or large increase, compared with just 4 percent pointing to a small or large decrease.
A combined 39 percent of respondents say that over the past year the level of resources their in-house legal/governance team spends on the project has seen a large or slight increase, while just 3 percent point to a slight decrease and none say they have seen a large decrease.
A similar though less marked pattern emerges in terms of preparing for the shareholder meeting. A quarter of respondents report a slight or large increase in the level of resources their in-house legal/governance team spends preparing for the company’s AGM over the past two years, with 15 percent reporting a slight or large decrease. A quarter of respondents also report a slight or large increase over the past year while just 7 percent cite a small decrease over that period.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
