Here’s an excerpt from this 13-page report about shareholder engagement disclosures penned by Labrador’s Cécile Linares (the report contains numerous disclosure examples):
“In a time of regulatory caution and shifting investor behavior, transparency in shareholder engagement remains essential. By refining disclosure practices and expanding the scope of engagement, companies can continue to demonstrate accountability and build trust with their investor base. Investors continue to scrutinize board structure, leadership, refreshment practices, and responsiveness.
As direct engagement shifts in frequency and format, companies must adapt their disclosure strategies without compromising transparency. Key modifications could include:
- Elevate outreach data. Illustrate the company’s efforts and willingness to engage and receive investors’ feedback by disclosure outreach metrics, even if the engagement is limited.
- Expand your definitions of engagement. Companies can receive feedback from their investor community through various and more indirect ways. Highlight the different ways your investor relations team keeps in touch with investors’ expectations, such as conferences, forums, symposium, sector associations events, etc.
- Shift from shareholders to stakeholders. Interactions with proxy advisors, rating agencies, thought leaders, or industry associations can provide valuable feedback for the company. Highlighting those exchanges will demonstrate efforts toward accountability and responsiveness.
- Expand your outreach to smaller shareholders. Most companies prioritize engagement with large institutional shareholders, but it might be a good time to focus on feedback from more numerous but smaller shareholders.
- Address proposal-driven dialogue. Detail conversations stemming from shareholder proposals or reactions to prior votes to show responsiveness.
- Report on engagement outcomes, even when interactions are indirect or informal.
- Maintain historical dialogue reporting. If more traditional dialogue mechanisms are getting slower and less effective, they are still a valuable source of feedback and should be addressed in the proxy.
- Include a high-level discussion of past discussions and the actions taken by the company in response.”
