{"id":43898,"date":"2024-03-05T11:01:48","date_gmt":"2024-03-05T16:01:48","guid":{"rendered":"https:\/\/allianceadvisors.org\/navigating-shareholder-engagement-disclosures\/"},"modified":"2025-09-16T03:21:32","modified_gmt":"2025-09-16T07:21:32","slug":"navigating-shareholder-engagement-disclosures","status":"publish","type":"post","link":"https:\/\/allianceadvisors.org\/es\/navigating-shareholder-engagement-disclosures\/","title":{"rendered":"Navigating Shareholder Engagement Disclosures"},"content":{"rendered":"<div class=\"wpb-content-wrapper\">[vc_row remove_bottom_col_margin=&raquo;true&raquo; css=&raquo;.vc_custom_1709653644267{padding-top: 30px !important;}&raquo;][vc_column]<div class=\"vcex-shortcode wpex-clr\">\n\t\t<div class=\"wppdfemb-frame-container-1\" style=\"-webkit-overflow-scrolling:auto;\">\n\t\t\t<iframe class=\"pdfembed-iframe nonfullscreen wppdf-emb-iframe-1\" src=\"https:\/\/allianceadvisors.org\/es\/?pdfemb-data=eyJ1cmwiOiJodHRwczpcL1wvYWxsaWFuY2VhZHZpc29ycy5jb21cL3dwLWNvbnRlbnRcL3VwbG9hZHNcLzIwMjRcLzAzXC9UTC1BbGxpYW5jZS0yUTI0LnBkZiIsImluZGV4IjoxLCJwZGZJRCI6NDM4OTl9\" data-pdf-id=\"43899\" data-pdf-index=\"1\" style=\"border:none;width:100%;max-width:100%;height:100vh;\" scrolling=\"yes\">\n\t\t\t<\/iframe>\n\t\t<\/div>\n\n\t\t<\/div>[\/vc_column][\/vc_row][vc_row disable_element=&raquo;yes&raquo; remove_bottom_col_margin=&raquo;true&raquo; css=&raquo;.vc_custom_1709657833988{padding-top: 30px !important;}&raquo;][vc_column][vc_column_text font_size=&raquo;lg&raquo;]Effective investor outreach can help boards understand and address investor issues &mdash; and avoid negative board votes.[\/vc_column_text][\/vc_column][\/vc_row][vc_row disable_element=&raquo;yes&raquo;][vc_column][vc_column_text]\n<blockquote><p>According to ISS, inadequate board responsiveness was the probable leading vote driver for 17 directors who received less than majority support from shareholders during the first half of 2023.<\/p><\/blockquote>\n<p>With January 2024 in the books, most companies have concluded their shareholder and <a class=\"glossaryLink cmtt_Proxy Solicitation\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Proxy Advisor&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; Firms like ISS and Glass Lewis that provide institutional investors with research, analysis,...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/compensation-advisory-case-study\/&amp;quot;&gt;Case Study: Previously, Failed Say on Pay Proposal Compensation Advisory, Shareholder Meeting Advisory&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/apac-power-generation-company\/&amp;quot;&gt;Case Study: EGM &amp;#8211; Shareholder Engagement&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.org\/es\/glossary-index\/proxy-advisor\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/proxy-advisor\/\"  href=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/proxy-advisor\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>proxy advisor<\/a> engagement sessions and are commencing the unenviable task of drafting their annual proxy disclosures. These engagements were centered on hearing what compensation, governance, environmental and social (E&amp;S), or sustainability risks an investor may perceive and ways to avoid future negative voting decisions. With this feedback in hand, companies are now asking themselves how much of it they ought to disclose in their 2024 proxy statements.<\/p>\n<p>While for many companies investor outreach has become an annual practice, aimed at building relationships and staying attuned to evolving investor expectations, others undergo this process to demonstrate board responsiveness following a low vote or to get ahead of a potential issue during <a class=\"glossaryLink cmtt_Proxy Solicitation\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Proxy Voting&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; The process by which shareholders cast their votes on corporate matters by proxy, rather than...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/privacy-policy\/&amp;quot;&gt;Privacy Policy&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/compensation-advisory-case-study\/&amp;quot;&gt;Case Study: Previously, Failed Say on Pay Proposal Compensation Advisory, Shareholder Meeting Advisory&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.org\/es\/glossary-index\/proxy-voting\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/proxy-voting\/\"  href=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/proxy-voting\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>proxy voting<\/a> season.<\/p>\n<p>For those companies, thoroughly communicating the engagement process and the board&rsquo;s response to feedback received from investors is a critical exercise that if not completed adequately can land directors in hot water.<\/p>\n<p>In fact, perceived lack of responsiveness following either a management proposal with low support or a <a class=\"glossaryLink cmtt_Proxy Solicitation\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Shareholder Proposal&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; A proposal submitted by a company&amp;#039;s shareholders for a vote at the company&amp;#039;s annual meeting....&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/compensation-advisory-case-study\/&amp;quot;&gt;Case Study: Previously, Failed Say on Pay Proposal Compensation Advisory, Shareholder Meeting Advisory&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/apac-power-generation-company\/&amp;quot;&gt;Case Study: EGM &amp;#8211; Shareholder Engagement&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.org\/es\/glossary-index\/shareholder-proposal\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/shareholder-proposal\/\" href=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/shareholder-proposal\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">shareholder proposal<\/a> with majority support is a key driver of low director support the following year. According to ISS, inadequate board responsiveness was the probable leading vote driver for 17 directors who received less than majority support from shareholders during the first half of 20231. For context, within the Russell 3000, 38 directors failed to receive majority support during the first half of 2023.<\/p>\n<p>To get any type of credit from investors and proxy advisors, proxy disclosures must disclose engagement efforts in detail. Companies should acknowledge the scope of the outreach, which includes disclosing the number of shareholders contacted and the number of shareholders the company engaged with. From the company side, many engagements are led by an independent director. Particularly for companies attempting to rebound from a poor vote, it is important to note the company participants, including independent directors. It is also critical that the proxy disclosure note the feedback the company heard from investors, both the positive and negative, and, most importantly, how the company is reacting to shareholder concerns. Are changes being made based on this feedback and if not, why?<\/p>\n<p>This type of information not only reinforces cooperation by demonstrating actions through dialogue, but it also exhibits to those shareholders that the company didn&rsquo;t interact with that it can change its policies. Companies, for their part, hope that the recent conversations will result in support at their shareholder meetings, be that board elections, say-on-pay, equity grants, article amendments or even the support against any shareholder proposals.<\/p>\n<p>One obstacle that some companies run into when making decisions on changes to reflect shareholder feedback is that many institutional investors will not have published their updated proxy <a class=\"glossaryLink cmtt_Shareholder Vote Projection\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Voting Guidelines&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; Criteria and principles used by institutional investors and proxy advisory firms to evaluate...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/compensation-advisory-case-study\/&amp;quot;&gt;Case Study: Previously, Failed Say on Pay Proposal Compensation Advisory, Shareholder Meeting Advisory&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/apac-power-generation-company\/&amp;quot;&gt;Case Study: EGM &amp;#8211; Shareholder Engagement&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.org\/es\/glossary-index\/voting-guidelines\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/voting-guidelines\/\" href=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/voting-guidelines\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">voting guidelines<\/a>. Meaning that companies may not know if their stakeholders will have adopted new red line policies or whether they have moved the goal posts on another guiding principle, such as the number of external mandates for non-executive board members. Furthermore, this timing on the publication of updated guidelines complicates even the addressing of comply-or-explain matters, as companies are not able to determine what shifts have occurred in proxy voting guidelines.<\/p>\n<p>This again is another area where professionally managed <a class=\"glossaryLink cmtt_Institutional Shareholder Engagement\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Shareholder Engagement&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; The process of establishing and maintaining communication and relationships between...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/contacto\/&amp;quot;&gt;Contacto&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/compensation-advisory-case-study\/&amp;quot;&gt;Case Study: Previously, Failed Say on Pay Proposal Compensation Advisory, Shareholder Meeting Advisory&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.org\/es\/glossary-index\/shareholder-engagement\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\" data-link=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/shareholder-engagement\/\" href=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/shareholder-engagement\/\" data-mobile-support=\"0\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">shareholder engagement<\/a> pays effective long-term dividends. By speaking with governance\/<a class=\"glossaryLink cmtt_Institutional Shareholder\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Stewardship&lt;\/div&gt;&lt;div class=glossaryItemBody&gt; The responsible and active oversight of investment holdings by institutional shareholders to...&lt;\/div&gt;&lt;div id=&amp;quot;cmtt_related_articles&amp;quot; class=&amp;quot;cmtt_related_articles_wrapper&amp;quot;&gt;&lt;div class=&amp;quot;cmtt_related_title cmtt_related_articles_title&amp;quot;&gt;Related Articles: &lt;\/div&gt;&lt;ul class=&amp;quot;cmtt_related&amp;quot;&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/compensation-advisory-case-study\/&amp;quot;&gt;Case Study: Previously, Failed Say on Pay Proposal Compensation Advisory, Shareholder Meeting Advisory&lt;\/a&gt;&lt;\/li&gt;&lt;li class=&amp;quot;cmtt_related_item&amp;quot;&gt;&lt;a href=&amp;quot;https:\/\/allianceadvisors.org\/es\/apac-power-generation-company\/&amp;quot;&gt;Case Study: EGM &amp;#8211; Shareholder Engagement&lt;\/a&gt;&lt;\/li&gt;&lt;\/ul&gt;&lt;\/div&gt;&lt;div class=glossaryTooltipMoreLinkWrapper&gt;&lt;a class=glossaryTooltipMoreLink href=https:\/\/allianceadvisors.org\/es\/glossary-index\/stewardship\/ &gt;Read more...&lt;\/a&gt;&lt;\/div&gt;\"  data-link=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/stewardship\/\"  href=\"https:\/\/allianceadvisors.org\/es\/glossary-index\/stewardship\/\"  data-mobile-support=\"0\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex='0' role='link'>stewardship<\/a> teams in late fall or early winter, companies may be able to determine where the pressure points are going to be in the next voting cycle. Additionally, Alliance Advisors&rsquo; experience has been that should an investor have pre-existing concerns with a policy, they will be forthcoming in their feedback and offer suggestions for improvement.[\/vc_column_text][\/vc_column][\/vc_row][vc_row disable_element=&raquo;yes&raquo;][vc_column]<style>.vcex-image.vcex_68e496c5e8de4 .vcex-image-inner{max-width:400px;}<\/style><figure class=\"vcex-image vcex-module vcex_68e496c5e8de4\"><div class=\"vcex-image-inner wpex-relative wpex-inline-block\"><img width=\"1500\" height=\"211\" src=\"https:\/\/e4h8grreyn6.exactdn.com\/wp-content\/uploads\/2024\/03\/ProxyPreview-2023_Logo_large5.png?lossy=1&amp;ssl=1\" class=\"vcex-image-img wpex-align-middle\" alt=\"Proxy Preview\" loading=\"lazy\" decoding=\"async\" srcset=\"https:\/\/e4h8grreyn6.exactdn.com\/wp-content\/uploads\/2024\/03\/ProxyPreview-2023_Logo_large5.png?lossy=1&amp;ssl=1 1500w, https:\/\/e4h8grreyn6.exactdn.com\/wp-content\/uploads\/2024\/03\/ProxyPreview-2023_Logo_large5-300x42.png?lossy=1&amp;ssl=1 300w, https:\/\/e4h8grreyn6.exactdn.com\/wp-content\/uploads\/2024\/03\/ProxyPreview-2023_Logo_large5-1024x144.png?lossy=1&amp;ssl=1 1024w, https:\/\/e4h8grreyn6.exactdn.com\/wp-content\/uploads\/2024\/03\/ProxyPreview-2023_Logo_large5-768x108.png?lossy=1&amp;ssl=1 768w, https:\/\/e4h8grreyn6.exactdn.com\/wp-content\/uploads\/2024\/03\/ProxyPreview-2023_Logo_large5.png?lossy=1&amp;w=600&amp;ssl=1 600w, https:\/\/e4h8grreyn6.exactdn.com\/wp-content\/uploads\/2024\/03\/ProxyPreview-2023_Logo_large5.png?lossy=1&amp;w=900&amp;ssl=1 900w, https:\/\/e4h8grreyn6.exactdn.com\/wp-content\/uploads\/2024\/03\/ProxyPreview-2023_Logo_large5.png?lossy=1&amp;w=1200&amp;ssl=1 1200w\" sizes=\"auto, (max-width: 980px) 100vw, 980px\"\/><\/div><figcaption class=\"vcex-image-caption wpex-mt-10\">This article originally appeared in Proxy Review<\/figcaption><\/figure>[\/vc_column][\/vc_row]\n<\/p><\/div>","protected":false},"excerpt":{"rendered":"<p>Effective investor outreach can help boards understand and address investor issues\u2014and avoid negative board votes.<\/p>\n","protected":false},"author":30,"featured_media":43884,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[230],"tags":[],"post_series":[],"ppma_author":[464,469],"class_list":["post-43898","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-es","entry","has-media"],"authors":[{"term_id":464,"user_id":30,"is_guest":0,"slug":"e-martinez","display_name":"Etelvina Martinez","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/14c2ef721f325d6b1e79278decbbd7521ed8630a1b91767976dcc06bb85f2a51?s=96&d=mm&r=g","author_category":"","first_name":"Etelvina","last_name":"Martinez","user_url":"","job_title":"","description":""},{"term_id":469,"user_id":39,"is_guest":0,"slug":"m-vogele","display_name":"Michael Vogele","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/d6fc5105e36286af376a19e96bf56eed785dd579aebe3bc27236fd8dc1ed33f1?s=96&d=mm&r=g","author_category":"","first_name":"Michael","last_name":"Vogele","user_url":"","job_title":"","description":""}],"_links":{"self":[{"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/posts\/43898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/users\/30"}],"replies":[{"embeddable":true,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/comments?post=43898"}],"version-history":[{"count":8,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/posts\/43898\/revisions"}],"predecessor-version":[{"id":61155,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/posts\/43898\/revisions\/61155"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/media\/43884"}],"wp:attachment":[{"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/media?parent=43898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/categories?post=43898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/tags?post=43898"},{"taxonomy":"post_series","embeddable":true,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/post_series?post=43898"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/allianceadvisors.org\/es\/wp-json\/wp\/v2\/ppma_author?post=43898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}