Corporate Secretary Week:
2011 annual meetings: what’s working and what’s not
Filed last week, Prudential’s proxy statement doesn’t disappoint. The life
insurance behemoth’s directors and executives took advantage of a proxy’s
potential to showcase their good works and included a ‘state of the union’
letter from the board touting the company’s ‘strong performance’ and
‘effective risk management’. The document also features shareholder-friendly
charts and graphics, including colored boxes that highlight Prudential’s
sustainability, corporate citizenship and shareholder engagement efforts.
A proxy this accessible is arguably expected from Prudential, where renowned
governance guru Peggy Foran serves as chief governance officer and corporate
secretary. But other companies, including General Electric, are similarly
using their proxies to highlight their best practices and strong
In fact, says Bruce Goldfarb, CEO of proxy solicitation firm Okapi,
Prudential’s use of its proxy statement as an investor relations tool is
evidence of a small but growing trend that’s been inspired – at least in
part – by companies’ unwillingness to incur the cost of creating and mailing
a glossy annual report.
‘Proxy statements have traditionally been documents that were drafted
strictly to comply with the regulations. They weren’t investor
relations-oriented sales documents,’ notes Goldfarb. ‘But I have had
discussions with companies that are planning on doing something similarly
unorthodox. With all the additional disclosure required these days, using
the proxy statement to help investors find salient information on which to
base investment decisions has become a worthwhile pursuit.’
Not surprisingly, the Prudential proxy has been a hit with corporate
governance proponents and shareholder groups. So have some newfangled annual
meeting accoutrements, like Twitter accounts. Starbucks set up a special
account just for its events, an undertaking that at least one investor
advocate has deemed worth considering, especially if your company doesn’t
have a Twitter account dedicated specifically to investor relations.
Starbucks drew criticism, however, for committing an act that’s become an
easy target for the 2011 proxy season pundits: failing to disclose the
results of the proposal votes for as long as 12 hours after the annual
meeting’s close. Apple made headlines for making a similar mistake earlier
in the season.
Companies aren’t legally required to release voting results immediately
after their meetings, but one thing’s for sure: failing to do so can make
even the most sincere attempts at transparency and communication appear
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Cross Border Ltd. 1995–2011.