In light of the SEC’s ban on broker voting, there is considerable concern about the conflicted business model of proxy advisory  firms such as RiskMetrics, which provides proxy voting recommendations to institutional investors along with a proprietary governance rating while an arm of RiskMetrics sells advice on how companies can improve governance scores.

Directors shouldn’t spend too much time railing against these firms. Rather, it’s time for boards of directors to bypass these groups and review their own governance policies including charters, bylaws and compensation rules so that they are well versed on the company’s corporate governance policies. At the same time, boards should develop an understanding of its shareholders and their concerns.

With this knowledge, boards will lower their resistance to speaking out about the role they play in providing oversight. They will become “communication ready,” willing to craft their own communication policy, a “rules of the road”, so to speak that supports a customized and effective shareholder engagement program.

In the old world where directors were assured easy election, criticizing proxy advisory companies was easy sport. Today, boards need to speak for themselves, communicating their competencies and the attention they are dedicating to the important work of representing shareholders and providing oversight.