Our Promised Checklist Of The Best Practices To Gear Up Early For Your Annual Meeting of Shareholders

For the majority of our readers, their annual meetings are six months or more away as we write this…But these days, six months beforehand is exactly the right time to start the planning process, and to swing into action as well.

Here are our top-tips on things to do…at least six months before the meeting date itself:

• Six months beforehand is actually THE time to launch your shareholder outreach programs. You should try to contact your 20 - 50 largest shareholders - to cover 60-80% of the institutional investor voting power – and to do so way in advance of their busiest season.

• While the number of investors and the approaches to use will vary widely from one company to the next, a simple phone call (best, we say, to add a nice personal touch) or an email is usually the best way to make the initial contact. Most times, all you need to do is to tell them the kinds of proposals that you expect to have on the ballot and ask if they have any questions, or potential ‘issues’ or any ‘hot buttons’ about them, or about the company in general that they would like to share - and go from there. Most times there will be no issues - and often, many of your top holders may not need or want to engage at all just then. But at least you’ll know. And this way, if you should get some shareholder proposals that you may want to lobby against later on, you have opened the door way in advance for a second conversation, if it seems warranted by either side.

• Six months beforehand is also the best time to circulate the first draft of your Task and Responsibility Schedule to everyone who will be on the meeting team, and ideally, to schedule an all-hands kick-off meeting to be sure that everyone is and stays totally ‘on task’ as events unfold.

• This year, as always, we think that companies should be paying special attention to enhancing the tone - and shortening and tightening the text as best they can. But they should also be looking to enhance the overall “look and feel” of the meeting materials this year: Many of the best and brightest companies have been working much harder on this - and raising the bar significantly. You really need a 6-month head start if you want to be sure you stand out well against your peer companies, as you should. So discuss this at the kick-off meeting - and plan to look at peer-company materials - and to bring in one or two well-regarded financial printers to hear their thoughts and to review a few examples of materials that exhibit best and “leading” practices. (And do check our online index of articles on this subject too.)

• Six months before the meeting date is also the right time to increase your overall scanning efforts with regard to developments in your industry, and at peer companies, and at companies where any of your director candidates may also serve - to be on the watch for potential issues that may spill over onto your own meeting agenda.

• If you haven’t already done so, “handicap” the ability of all your director candidates to get 90%+ of the votes in favor of their election. And keep your eyes and ears open wide as the meeting date approaches. Potential red-flags include things like age, tenure, membership in key committees (like nominating, governance, comp or audit - if there have been any “issues”) membership on other boards - and especially on boards where there may have been “issues” totally unrelated to your own company’s. If there may be “issues” - deal with them at once. No director wants to - or can afford to - get less than a 90%+ approval these days. And, for sure, you would not want the blame to fall on you, or your team.

• This is also the time to start asking if the venue you have chosen may need a re-think in light of potential new issues. Might a bigger - or a smaller venue - be in order? Might you need to beef up security - or maybe consider moving to a venue with tighter security? We have been amazed to see how many companies have made relatively last-minute changes in the meeting venue over the past few years in response to breaking developments.

• A related effort should be to dust off your official Rules of Conduct for the meeting, to see if they may need to cover more issues in more detail than last year - or maybe (and wouldn’t that be nice?) could be shortened up.

• Once the deadline for submitting shareholder proposals has passed - usually 90 days before your record date - top priority needs to be given, of course, on how best to respond. We would note the increasing numbers of shareholder proposals that are “negotiated out” or simply allowed in without argument these days…and remind our readers that “protesting too much” often produces results that are not really the best ones, all things considered…So save your rhetoric, and your money, and your image as a company too, by rolling out the big guns only for issues that are truly important ones.

Just a reminder - there are numerous articles about Annual Meeting Planning issues on our website, like Admission Criteria, Codes of Conduct, Security, Site-Selection, Dealing with Shareholder Proponents, Gadflies and other would be meeting speakers, etc. Here’s to safe, sane and productive meetings!