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Boards: talking with shareholders is not optional
I've been on vacation this week, in Perth, Western Australia, with my wife. One of the things that we enjoy while away is to read newspapers that we wouldn't normally see at home, especially the local newspaper. This routine gives us a different perspective on what's going on in the world at large, which serves to broaden our horizons. I try to get my hands on a print copy of the The Australian when in Australia, and often read online versions of the New York Times and The Times as well.
The commentary pieces and investigative articles published in major newspapers are often quite thought-provoking—particularly when one is relaxing over a coffee and a muesli breakfast. For example, this article, published in the New York Times today, caught my eye. It highlights the difficulties that investors are having in talking with the boards of the companies they own (or, more correctly, part-own). I was stunned. Why would any director who is serious about their contribution not talk to the people to whom they are responsible and accountable? It smacks of hubris. More importantly, what can be done to remedy this problem?
The commentary pieces and investigative articles published in major newspapers are often quite thought-provoking—particularly when one is relaxing over a coffee and a muesli breakfast. For example, this article, published in the New York Times today, caught my eye. It highlights the difficulties that investors are having in talking with the boards of the companies they own (or, more correctly, part-own). I was stunned. Why would any director who is serious about their contribution not talk to the people to whom they are responsible and accountable? It smacks of hubris. More importantly, what can be done to remedy this problem?
Point well made. I'm not aware of any requirement in law for such meetings other than at the AGM - where shareholders can make their opinions known. And directors ignore shareholder warning signals at their peril. So it becomes a question of stakeholder management. SDX offers some guidance on how a company protocol for shareholder engagement might look. bit.ly/1qIOd9y Perhaps you know of other such guidance?
Regards
Alan
The New Zealand and Australian statutes set the bar at the same level as you describe—an AGM is the minima.
To your point about stakeholder management. I wonder whether the focus should be on director/board management? Shareholders put directors in place, so they *should* drive what they want in terms of communications. However, I suspect few do, and quite a few boards seem to take advantage of this.
Thanks for the SDX link, I was not aware of that document. I will check whether the Institute of Directors in New Zealand or the Australian Institute of Company Directors provides any guidance.