One in three boards reported direct contact with more than 20 percent of shareholders in 2012, Deloitte study shows
Corporate board members are increasingly engaging directly with shareholders, holding longer and more frequent meetings and reviewing more closely companies’ policies on succession of the chief executive, according to a study of the US market by Deloitte.
Fifty-three percent of public companies report some form of direct contact between their boards and their shareholders in 2012, an increase from 49 percent in 2011, according to Deloitte’s 2012 Board Practices Report. Thirty-three percent of all corporate boards met with more than 20 percent of their company’s shareholders in 2012, while another 30 percent report direct contact with between 1 percent and 5 percent of shareholders.
‘The report shows board members are really working on enhancing their interactions with each other and with shareholders, which goes along with wider trends related to facility of communication,’ says Maureen Errity, director of the Deloitte Center for Corporate Governance, in a statement. ‘There’s no longer the sense that boards operate behind closed doors.’
The Deloitte study also shows that 53 percent of all public companies had a policy governing contact between directors and shareholders last year, an increase from 51 percent in 2011. Fifty-four percent of large and medium companies had such a policy, as did 51 percent of small companies.
At the same time, the number of companies that require directors to attend annual shareholders meetings dropped to 54 percent in 2012 from 74 percent in 2011, according to the study, which measures 15 corporate board policies based on responses from almost 200 corporate secretaries. The drop is most significant among large-cap companies, where the rate fell to 38 percent in 2012 from 69 percent in 2011.
The report also finds that only 2 percent of all public companies held a so-called ‘fifth analyst’ call with investors to discuss issues related to corporate governance. Another 5 percent of companies say they considered holding one, while 73 percent didn’t hold one or consider it and 20 percent say they have never heard of the term.
Asked whether their organization uploads their CSR or sustainability report to the corporate web site, 54 percent of all companies say they do, 23 percent say they do not, and the rest say they don’t know or that the question is not applicable. Thirty-nine percent of companies say they have adopted at least one new sustainability initiative in the past year, while 38 percent say they have not.