Transparent communication with shareholders is a shared priority of the board and management. It is not only essential for regulatory compliance, but also in maintaining trust and ultimately driving long-term value. In a dynamic business environment, impacted by changing regulatory and geopolitical factors, boards are more vulnerable than ever to activist campaigns and potential proxy battles. To mitigate these risks, here are some questions that boards should consider asking to ensure that they have a productive shareholder communication strategy in place.
- Do we regularly review and update our publicly facing governance documents to align with our board agendas, governance activities, meeting minutes and other publicly issued documents?
- Do we have a policy and process for shareholder outreach and do we review our communications to shareholders and others to ensure transparency?
- What are the key concerns of our shareholders and are we adequately addressing them and communicating our response?
- How can we proactively engage and communicate further with our shareholders?
- Do our board composition and corporate governance policies align with our mission and values that provide credibility to our positions?
- Are there weaknesses in our business operations and strategy that would attract activist attention? How are we actively addressing these?
- Do we have a communication strategy in place for responding to activist demands?
- Do we have advisors identified to help us navigate an activist campaign?
- Do we have a strategy to balance prioritizing long-term value creation with addressing immediate concerns raised by activists?
- Can we withstand the financial costs of dealing with activist campaigns and what are the impacts that a proxy battle may have on our business operations?