The nature of shareholder engagement is quickly changing. Corporate boards that fail to acknowledge this will soon find themselves between a rock and a hard place.
With a rise in shareholder activism, investors are now clamoring for more frequent communication from both executives and directors. PwC’s Paula Loop described this new paradigm in a recent blog. Now boards are scrambling to figure out: What approach should we be taking? Where do we start?
New Imperatives for Shareholder Engagement
The Governance Insights Center at PwC recently released a publication titled, Director-Shareholder Engagement: The New Imperatives.
In the report, PwC acknowledges the increasingly important role of corporate directors, and how boards are currently reshaping their strategies for investor engagement. Addressing several questions, the publication explores:
- What are the new imperatives for directors?
- What are your investors looking for?
- What should directors expect of management?
- How are directors getting involved?
- What are companies disclosing?
PwC offers several tips on how directors can best prepare for investor meetings. The report also covers the shareholder engagement expectations of top institutional investors, including BlackRock, Vanguard, MFS, and The Capital Group.
“We are asking that every CEO lay out for shareholders each year a strategic framework for long-term value creation. Additionally, because boards have a critical role to play in strategic planning, we believe CEOs should explicitly affirm that their boards have reviewed those plans.”
– Larry Fink, BlackRock CEO, in a letter to S&P 500 CEOs
Catherine Bromilow, an author on this report, visited Inside America’s Boardrooms in May to discuss several of these shareholder engagement trends. Don’t miss her episode, along with our most recent edition of the Investors Board Performance Review (featuring Vanguard, Glass Lewis, and Trian Partners, who share their expectations for engagement).