Updated shareholder engagement guide provides Canadian boards with best practices and forecasts trends for the year ahead
TORONTO, Feb. 7, 2019 /CNW/ - Kingsdale Advisors is releasing a 2019 update to its instructive publication The Definitive Guide to Director-Shareholder Engagement. Since its publication three years ago, the guide has served to help create a new paradigm for the way independent directors interact with shareholders. New material for 2019 will equip directors with the tools needed to respond to increasing demand for engagement from institutional investors, meet rising governance and transparency expectations and adequately address an increased focus on ESG issues.
"When we first published this guide and met with boards across Canada, Kingsdale was the only firm emphasizing that director-led shareholder engagement would become mission critical for the success of boards and the companies they lead in the coming years," said Kingsdale's Wes Hall, Executive Chairman and Founder. "Since then, we have distributed over 5,000 copies of The Definitive Guide to Director-Shareholder Engagement and today we see that director-shareholder engagement has become the new normal with a majority of TSX 60 companies disclosing their engagement policies."
Some of the most noteworthy developments for 2019 include:
Shareholder engagement is the new normal. As of the end of 2018, 62% of the TSX 60 included formal shareholder engagement policies in their circulars. These numbers show that engagement is more than a trend—it is a valued part of any major company's business and governance strategy.
Institutional investors are devoting more resources to meetings with boards. Large institutional investors are committing personnel, infrastructure, and resources to engage with company executives and directors by establishing 'engagement teams.' These investors expect to be engaged outside of proxy season, in good times and in bad, not just when companies need their support.
"ESG" has helped drive engagement. Since we launched our original guide, ESG concerns have exploded. As a result, Canadian companies have increasingly had to respond to shareholder queries and meeting requests on issues such as what is being done to address climate change risk, build inclusive and safe workplace cultures, manage supply chains and more.
Engagement gives management a voice on par with proxy advisors. Shareholder engagement is the ultimate tool to ensure that shareholders make informed decisions regarding proxy voting. This tool should be management's first response to counterbalance the influence of proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis.
"Over the past several years, the rise of shareholder activism, the rapid availability of information through the internet, along with a growing sentiment that directors be more accountable and transparent has raised the bar for shareholder engagement. Engagement can no longer be an afterthought—a 'it would be nice if we had the time' activity. It has to be a priority," said Amy Freedman, Chief Executive Officer. "Canadian issuers are realizing this. Over the past several years, we've worked with a growing number of Canadian issuers to develop comprehensive engagement strategies, make appropriate disclosures about their activities in their circulars, and recruit and train directors who have a competency in shareholder engagement."
Kingsdale's updated The Definitive Guide to Director-Shareholder Engagement can be downloaded here.
About Kingsdale Advisors: With offices in Toronto and New York, Kingsdale Advisors is the leading advisor to public companies on all shareholder, governance, and transaction related matters having acted on the largest and highest profile proxy fights, transactions, and other special situations. Since 2003, public companies across North America have looked to the expertise of Kingsdale Advisors to secure the success of transactions or resolutions driven by shareholder votes. Kingsdale Advisors' multidisciplinary team offers an array of specialized services focused on strategic and defensive advisory, governance advisory, compensation advisory, strategic communications, voting analytics, and creative services.
SOURCE Kingsdale Advisors
For further information: Ian Robertson, Executive Vice President, Communication Strategy, Kingsdale Advisors, Direct: 416-867-2333, Cell: 647-621-2646, Email: [email protected]