InsightsEQ ViewsCorporate Governance Consultants: Your Secret Weapons
Corporate Governance Consultants: Your Secret Weapons
Friday, December 6, 2019
In today’s business climate, the expectation for success can be overwhelming, making it nearly impossible to keep tabs on all that success entails. When you’re being pulled in multiple business directions at once, you might not have time to handle corporate governance red flags. Companies that recognize corporate governance as a priority include a corporate governance consultant to provide valuable information and advice on this critical need.
A thorough corporate governance consultant will do this through a review of your company’s corporate governance framework, including taking a close look at the board of directors and governance provisions outlined in the proxy statement. The consultant will review the company’s website, and examine your company’s executive compensation and shareholder rights. You will gain information on how voting has turned out at annual shareholder meetings, particularly examining director vote results, “Say on Pay” proposals and shareholder proposals.
Get ahead of potential problems
If there were problematic vote results, the consultant will analyze why this occurred and will provide suggestions to improve voting at the next annual meeting. In addition, the consultant will analyze your company’s institutional investors and will provide information as to how they voted at the last annual meeting, how they are likely to vote at the next annual meeting and indicate whether they subscribe to a proxy adviser. EQ can also provide institutional voting contact information for your company, as well as proper planning and guidance for shareholder outreach and engagement - these are key to successful meeting outcomes.
Communicate better, both internally and externally
One of the keys to long-term success for any organization is robust communication. This means maintaining open channels among the board of directors, management, employees and shareholders. The board and management, corporate secretary/general counsel, investor relations, and human capital management areas need to remain aligned on corporate governance issues to effectively head off crises and keep the company focused on sustainable success.
A corporate governance consultant can help with communication. For example, the company’s IR officer will know the buy/sell side managers at the institutions, but probably does not know the proxy decision-maker. The corporate governance consultant can assist by having both the internal and external sides aligned, and this helps the company in its aim toward a successful proxy campaign.
Having a complete picture of who your shareholders are, and how they are likely to act, gives corporate officers the confidence to anticipate problems and take action before it’s too late.
Keep surprises to a minimum
Nobody wants to be blindsided by unexpected developments at shareholder meetings. It’s unacceptable to walk into the room not knowing as much about your company and its investors as you possibly can – especially when things don’t go according to plan. Corporate governance consultants can level the playing field and make sure you are not taken by surprise when it matters the most.
Tom Kies, EVP of EQ Proxy, says that an effective corporate governance consultant helps to eliminate any uncertainty in advance of these critical shareholder voting situations. Even large companies are not immune to unwelcome surprises: “Everyone’s a target,” he notes. Having a complete picture of who your shareholders are, and how they are likely to act, gives corporate officers the confidence to anticipate problems and take action before it’s too late. The services a corporate governance consultant provides act as “insurance that things go smoothly,” Kies says.