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I know it seems like I’ve got proxy season on the brain lately but I thought this piece from Morrow & Co. was really well done and worth passing along.
After reading it, here’s my question to you: is blindly following the recommendation of a proxy advisory services firm a cop out on the institutional investor’s part? I think I do.
Don’t get me wrong - I understand the role that ISS and Glass Lewis (among others) play in today’s corporate governance… and it’s an important role. We need them on that wall.
I just find it hard to believe that an institution that has invested enough time and resources required to take a position in a company’s equity does not allow itself to take a position in that same company’s proxy. What am I missing?
I had an interesting conversation with the head of one of the premier proxy solicitation firms in the country last week who said that, to this point, the anticipated wave of companies actively preparing for the new rules of engagement in this year’s proxy season has yet to hit shore.
Talk? Yes. Action? Nope.
Am I surprised? Is Too Tall Jones really too tall?!!?
Boys and girls, proxy season is closer than you think. Now is the time to start digging into your shareholder base to see how the votes may fall and with whom you may need to spend a little more time talking through the issues on the ballot. Now is the time to start expanding your proxy biographies for directors to include specifics on how that individual’s experience will help accelerate the company’s growth plan. Now is the time to start resetting investor expectations as the global economy continues to recalibrate. Now is the time to start taking a close look in the mirror at your governance practices and protocols and gauging how they stack up against your industry, as well as best practices.
I fully realize that I can worry about things a little sooner and/or a little longer than most folks. But, let me ask you this: where’s the harm in being truly prepared?
