Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

See related case examples of

Dell Inc.

appraisal rights for intrinsic value realization

and

Walgreen Co.

stock buyback policies

"Fair Access" Home Page

"Fair Access" Program Reference

For graphs of specific company and related industry returns, see

Returns on Corporate Capital

For graphs of specific company voting for the past 5 years, see

Shareholder Support Rankings

 

 

 

Forum distribution:

Evolving practice of professionalized "engagement"

 

For coverage of the earlier foundations of off-season engagement by the publisher of the article below, see

See also the following articles about the development of both corporate and shareholder support for "continuum" communications, from issues of the E-Meetings Review published to cover the Shareholder Forum's program that established marketplace standards for Electronic Participation in Shareholder Meetings:

 

Source: IR Magazine, November 5, 2018 article


Ben Ashwell

Digital editor

Demand for off-season meetings ‘highest ever’, says SSGA’s ESG lead

NOV 05, 2018

Director engagement also on the up

When Rakhi Kumar joined State Street Global Advisers (SSGA) in 2011, the notion of off-season engagement didn’t exist. But by mid-October this year, Kumar – who serves as SSGA’s senior managing director and head of ESG investments and asset management – says the demand for meetings is ‘the highest we’ve ever received’.

In the week IR Magazine caught up with Kumar, she had received 25 requests from different companies for meetings. While she welcomes the opportunity to catch up with certain companies during the off-season, she explains that SSGA has its own methodology it sticks to when deciding which meetings to take. As an asset manager that votes more than 17,000 proxy issues in a year, having a robust system is a necessity.

‘About 90 percent of our meetings are unique engagements throughout the year,’ Kumar  explains. ‘We really control it. If we spoke to you in proxy season, that was your chance to speak to us. We have a very comprehensive engagement and we will have brought up everything we wanted to discuss.’

There are exceptions, Kumar notes, and it’s up to the company to explain why it needs a follow-up meeting. She’s not interested in being updated on the board’s decisions after a listening campaign, for instance, but if a company is under attack from an activist, has some performance challenges or anticipates some new shareholder proposals, Kumar’s team will consider taking meetings.

Proactive engagement

Kumar is keen to stress that SSGA has its own proactive way of managing off-season engagement – according to SSGA’s annual stewardship report, 85 percent of engagements are proactive. Each year, it picks three sectors it will focus on, as well as a list of themes to focus on, which are contained in SSGA’s annual stewardship report. The sectors for 2018 are:

  • Retail (food/apparel/distribution)

  • Pharmaceuticals

  • Materials.

The themes being prioritized this year are:

  • Sustainability and climate

  • Governance and compensation

  • Diversity and stewardship.

‘We report back to companies about what we learned from these engagements,’ Kumar says. ‘We look at each of the sectors and themes we have prioritized and identify the main challenges they face. We give a lot of insight on the questions we are likely to ask.’

This section of SSGA’s 2018 stewardship report takes up 26 pages and provides information on the number of companies engaged during the past year and what was learned.

When is off-season?

Traditionally, off-season has been defined as occurring in September, October and November. At a recent IR Magazine event, however, one governance adviser recommended that the audience consider cutting through the noise by sending requests for meetings in August.

But Kumar says this tactic isn’t necessary – or welcomed – at SSGA. ‘The fact that I know the number of meeting requests we got this week tells you that I’m shocked by the number,’ she says. ‘The reality is that in the summer we need that down time. We’re coming out of proxy season, which is grueling, and we’re processing everything that happened, what the trends are and how that affects us. We need July and August as a break from constant engagement so that we can hit September fresh.’

Director engagement

Kumar says board directors are increasingly participating in off-season engagement, and they’re a welcome addition. ‘We used to have to ask to see board members, but now they’re coming with the intent of meeting us,’ she says. ‘Engagement culture is getting more sophisticated. Directors understand that we’re giving them a totally different view from what they would get talking to an active portfolio manager who is only going to ask them questions about what the next quarter looks like. Because we’re pretty transparent on our positions once we have them, we’ve had directors come and say they’ve shared our thought-leadership inside the boardroom and it prompted a good debate.’

Kumar paints a picture of a much more developed, and civil, relationship that is forming between her team and the directors they interact with. ‘Many of the directors coming out are comfortable doing so,’ she says. ‘Years ago, when engagement was new, it was not unusual for me to be yelled at by directors. I haven’t been yelled at in a couple of years.’

 

Copyright IR Media Group Ltd. 1995 - 2018 All rights reserved.

 

 

This Forum program is open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to access@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.