In principle, corporate directors have embraced greater transparency and communication with shareholders through various organizations including the Business Roundtable and the National Association of Corporate Directors. Yet individually, most directors are reluctant to interact with shareholders. Many invoke (while secretly expressing gratitude for) Regulation FD.
“Communicating is not in our DNA,” one director confided. Continue reading
In his entreaty to his fellow senators to support his Shareholder Bill of Rights Act of 2009, Charles Schumer notes that “one of the central causes of the financial and economic crises… is the widespread failure of corporate governance.” As he summarizes it, “too many corporate boards neglected their most fundamental responsibility—to prioritize the long-term health of their firms and their shareholders, and oversee management accordingly.” Continue reading
Many boards heaved a collective sigh of relief after this year’s annual shareholder meeting. Many, but not all. At the Citigroup annual meeting, directors fielded questions for six hours, allowing shareholders to express their frustration and pain over the devastating loss in shareholder value.
Meanwhile, in Charlotte at the Bank of America annual meeting, shareholders stripped Ken Lewis of his Chairman mantle. Given these circumstances, most directors in this season of shareholder meetings felt lucky to escape with a random interruption by a shareholder gadfly or an extended question that became a chance to pontificate during the Q&A period. Continue reading
Board-shareholder communications begin with the board, which oversees management communications to shareholders. The board can also communicate directly with shareholders when needed.
As a result of the events of the last 18 months, however, boards of directors are moving to develop more formal board communications policies and schedules. Continue reading