Board Member, Meet Shareholder

Nederlands: Vergaderruimte Boardroom Kromhout ...

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The Conference Board recently published a blog post on the rapid increase in shareholder requests for special meetings with board members.  Several factors are influencing this trend, including “say-on-pay” and more and more investors calling for the appointment of an independent board chairman.  Indeed, shareholder activism seems to parallel this new wave of requests for special meetings.  The question is, should board member-shareholder engagement be shunned or embraced?  Let’s first review some results from a recent survey conducted by the National Investor Relations Institute.


  • The majority of survey respondents (60%) state that their companies do not permit board members to engage directly with shareholders (defined as in-person or via telephone).
  • Within companies that do allow direct communication, 65% state that any board member may speak directly, while 35% state that only certain board members may speak directly to shareholders.
  • Within companies that do allow direct communication, 57% indicate that a member of management is not required to be present during these discussions.
  • In general, as market cap increases, so does the likelihood that only certain board members may speak with shareholders and that management’s presence is required.
  • Companies are only slightly more likely (43%) to facilitate indirect communication between boards and shareholders (defined as e-mail responses to questions via a third-party, such as the IR department or corporate secretary’s office), than direct communication (40%).

There are pros and cons to board member-shareholder engagement, and much of that depends on the shareholder base and propensity for activism. But as the Conference Board points out, engagement is here to stay and it behooves companies to develop a plan of engagement long before a rogue activist is banging down the door.

Following are a handful of tips to consider when board members engage with investors:


  • Instead of letting them come to you, proactively engage top investors with a specific agenda, whether it is to discuss the company’s executive compensation plan or other corporate governance concerns.
  • Make sure the board member is accompanied by an investor relations representative or another knowledgeable board member.
  • Try to summarize positive developments for the company at the beginning of the conversation.  It is easy to get derailed or focus on one specific topic from the outset of a conversation and never return to a broader discussion about positive developments.
  • Set time parameters.  Generally, 30 minutes to an hour should more than suffice.
  • Ask questions.  Yes, the investor is generally asking the board member questions. But engaging with an investor could provide invaluable insight that could greatly improve shareholder relations.

— Evan Pondel,

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Post Investor Day Thoughts

Nasdaq Times Square_1106

Nasdaq Times Square_1106 (Photo credit: gmacfadyen)

I recently returned from helping a client host a very successful investor day in New York City.  Every year for the last four years, we have introduced various members of our management team, customers and industry pundits to nearly 100 investors to help them better understand our opportunities and long-term goals.  Our 2013 event was the best yet, so I thought it might be interesting to share some pointers for a successful investor day, while it’s still fresh in my mind.

  • Hold an event only if you have  something to say.  Make your investor day worth the time and effort it takes to successfully produce a great event, and ensure your audience leaves with a favorable opinion of the company.  Holding an event just for the sake of having one is not a great decision.  Holding an event because you have new wisdom to impart about the company, is.
  • Target your audience.  The day is only as good as your attendee list.  Those with a keen interest in your company will help facilitate a more interactive session with great questions and a chance for your management team to shine.
  • Expect no-shows.  Drop off is generally in the 10-20% range, but a bad day in the market or extraordinary breaking news can drive that number up to the 50% range.
  • Be selective in who presents.  Those parts of your business that command investor attention should be included, while those that may not be core to your long-term growth strategy needn’t be.
  • Consider using guest speakers.  Allowing those outside your company to communicate with investors, provides you with third-party support and adds a little something special to your event.  Guest speakers can be solo participants, part of a panel, or included in a fireside chat.  Again, be selective.  Use outside speakers only when you are relatively certain that they will speak positively about your company and that they have a good stage presence.
  • Provide hard copies of your presentation.  There has been much debate recently on NIRI’s eGroups message boards about the benefits (or lack thereof) of slide deck hard copies.  While it’s true that digital communication is the wave of the future, and possibly even of the present, I’ve found that investors generally like to hold the decks in their hands, have them available for easy reference and use them for note taking.
  • Choose your venue carefully.  You’ll want to pick an event space that can comfortably hold all of your guests, leaving them room to spread out a bit, while ensuring the presenters and screen can be seen from anywhere in the room.  I can personally recommend the spaces at Nasdaq and Convene.
  • The message is king, but logistics matter.  While the message is key to giving investors the clarity and visibility for which they are looking, logistics are just as important.  Keep guests comfortable by providing food and drinks (an informal lunch or cocktail party gives investors a chance to mingle with management).  Offer an agenda and clear guidance on what guests should expect during the day.  Have notebooks and pens available for guest use.  Think about what would make you comfortable at an event, and provide that for your guests.
  • Webcast, webcast, webcast.  Not only will a webcast ensure compliance with Reg FD, but it will allow those who cannot travel to the event a chance to participate.
  • Invite the board.  Having the board in attendance shows their commitment to your company, while bringing them closer to your investor base.  A recent opinion piece in the Wall Street Journal highlighted the need for better communication between these constituencies.  In my book, transparency is always the best policy.

Perhaps the most important piece of wisdom I can share is to have fun with it.  It takes a lot of work, and at least six months of lead time, to produce a successful investor day.  But, if you take a step back to enjoy the day and process, you might find it to be a meaningful experience.

— Laurie Berman,