Take the Dodd-Frank Challenge
I had the pleasure of grabbing coffee with IR legend Lou Thompson last week after his speech at the local NIRI chapter meeting. For those of you who have had the pleasure of working with Lou over the years, you know full well what an insightful (and humble) man he is. What continues to amaze me about him is how quickly he can identify the critical issues facing the IR professional and then how succinctly he can articulate the steps IROs need to take to address the issues. I also appreciate how much he causes those around him to think and reflect.
His presentation was focused on the role of IR in the wake of Dodd-Frank. Among other words of wisdom, Lou encouraged IR professionals to join forces with their corporate communications brethren, the corporate secretary and top governance officer at their company to form a “campaign strategist” function. Among other things, this new multi-disciplined function would be tasked at securing the necessary shareholder support on the executive compensation plan and the slate of directors. The campaign strategist function would have to begin its efforts long before the proxy drafting process is started - including meeting with those that actually cast the votes within investor organizations - so that it could provide senior management and the board with an unvarnished view of what really matters to shareholders as they evaluate management proposals.
Makes perfect sense to me… now, more than ever, we should be thinking of this process as a proxy campaign rather than a proxy contest (read: a marathon, not a sprint). If my experience with dissident investors is anything near the norm, these investors start spreading their seeds of doubt months, if not years, before mounting a full-fledged proxy fight. As a result, management has lost the vote before the proxy has been mailed in many cases.
So… the question I kept asking myself this morning on my daily walk was: will IROs take the Dodd-Frank challenge? I hope so… but I couldn’t convince myself that it would be an overwhelming majority. I don’t know if it’s the atrophy from years of deferring all things annual meeting to the general counsel’s office or something so sinister that only Olivia Dunham can figure it out… whatever it is, I fear IROs will miss a unique opportunity to earn that coveted “seat at the table” that has been pined for at so many industry conferences.
I hope I’m wrong. Please - tell me I’m wrong - please assure me that our profession will evolve with the landscape around us.
