With Proxy Season Around the Corner, Are You Ready?

As investor demands regarding the quality of board governance steadily rise, effective disclosure of board practices in the proxy statement—including board composition and executive-compensation design—has become a critical communication vehicle ahead of the annual vote. To facilitate investor understanding, proxy filers should craft engaging narratives and offer clear visibility into their organization’s board governance approach and emerging investor priorities—from human-capital management and boardroom diversity to environmental, social, and governance (ESG) issues.

A recent snapshot drawn from NACD’s upcoming 2018–2019 NACD Public Company Governance Survey indicates that companies are proactively enhancing the value of their proxy statements by including more information and making the format more engaging.

To help boards and their companies develop more transparent and easier-to-digest 2019 proxy statements and to help them anticipate likely shareholder challenges to current practices, NACD has created a curated list of practical new resources that directors, general counsel, and investor-relations staff can readily put to work.

NACD Resources

• NACD recently published The CEO Pay Ratio: Data and Perspectives from the 2018 Proxy Season—a report authored by compensation consulting firm Pearl Meyer—which reveals insights gleaned from the first crop of CEO-pay-ratio disclosures.
• Earlier this year, NACD announced the NXT Initiative—a multiyear project created in partnership with Deloitte—which calls for a greater focus on boardroom diversity, inclusion, and innovation. As part of the initiative, NACD launched two practical tools to help support boardroom efforts around diversity: Investor Perspectives on Board Diversity and Director Tip Sheet: Discussing Boardroom Diversity With Major Shareholders.
• NACD’s Director Essentials: Preparing for Proxy Season offers a primer on proxy season fundamentals, including topics such as proxy voting, proxy access, and proxy advisors.
• NACD’s 2018 Benchmarks on Board-Shareholder Engagement uses data from the forthcoming 2018–2019 NACD Public Company Governance Survey. The benchmark report provides insights on the current state of board-shareholder communications among public companies of varying sizes.

Additional Resources on Leading Proxy Practices

• 2018 Guide to Effective Proxies (Donnelley Financial Solutions)
• “Best Practices for a More Powerful Proxy Statement” (Broadridge)
• Proxy Voting and Engagement Guidelines (State Street Global Advisors)

Review of Proxy Season 2018 Trends

• “Surprises from the 2018 Proxy Season,” (Harvard Law School Forum on Corporate Governance and Financial Regulation)
• 2018 Proxy Season Review (ProxyPulse/Broadridge and PwC)
• 5 Noteworthy Trends From the 2018 Proxy Season (Labrador)

NACD members can also visit our Resource Center on Preparing for Proxy Season to access more resources.