The proxy statement is still the primary channel of communication between the board and company shareholders. Not only are boards challenged to meet investors’ increasing demands for disclosure, but they must ensure this lengthy document effectively tells their story: How does each decision, action, or investment tie back to our company’s long-term strategy?
In this episode, Ron Schneider, Director of Corporate Governance Services at Donnelley Financial Solutions, returns to discuss the art and science of an effective proxy statement—and the critical role it plays in shaping investor voting decisions. Schneider outlines recommended practices for various proxy sections: ESG, diversity, executive compensation, board evaluations, etc.
I’ve heard people say: ‘Good disclosure is explaining that you have a process. Better disclosure is explaining what that process is. Great disclosure is explaining the results of that process.’
Pulling examples from the Guide to Effective Proxies, a collection of best-in-class proxy examples assembled each year by Donnelley Financial Solutions, Schneider emphasizes the importance of tying each section back to strategy. He also outlines several common mistakes that boards make when drafting their proxy statement.