How Regions Financial is navigating to a ‘new normal’
Regions held its first virtual AGM this year due to the pandemic. How did you prepare for that?
Planning for the unexpected and being proactive are key components of good governance. A few years ago we amended our bylaws to allow for a virtual meeting in case there was an emergency or other disruption. Then toward the end of January we started hearing a lot about the pandemic and started considering the need for a virtual meeting, so we put contingency plans in place to enable us to move to that smoothly if necessary.
We did things like call Broadridge to see whether it had a list and, if so, whether we could get on it. We made sure we understood the state law requirements and put the necessary language in our proxy statement to reserve the right to transition to a virtual meeting. And we started talking to the board about what we were doing and saying that this was a possibility.
As Covid-19 continued to emerge, the board and management started having more frequent dialogue. We now have a weekly board call to keep directors informed about what is going on – including the move to a virtual meeting – so they can fulfill their oversight duties. We prepared them for how they would participate, and they all took part in the virtual meeting. Everybody did it remotely to protect everyone’s health and safety.
What rules did you have in terms of shareholder participation?
We did not have any shareholder proposals but we wanted to make sure shareholders could submit questions either before or during the meeting, so we opened a portal allowing them to [do that]. We wanted to be as open and transparent as possible. If we had had a shareholder proposal, I know we would have allowed [the shareholder] to present [it] and would have given it sufficient time. Our shareholders are an important stakeholder and we want to make sure they are heard.
We had more participation in our meeting because we allowed guests to log on. We wanted to make sure people were hearing our message because a lot of that centered around Covid-19. Everything was already out there publicly but we wanted to make sure that anyone who wanted to hear it could hear it.
Are you expecting to stay with a virtual meeting next year?
We’re going to evaluate the situation. I think there are pros and cons of having a virtual meeting. Everything went very smoothly for us and we’re in Birmingham, Alabama, so one benefit is that we can have more shareholders tune in. But I think you lose something by not having it in person. I don’t think we’re at the point of making a decision.
I know there’s a lot of discussion with shareholders [in general] about virtual meetings and their opinions on them. While we may not see the same number of virtual meetings [next year] as we did this year, I think this will be a turning point. My opinion is that if you have concerns about a virtual meeting as a shareholder, that’s understandable, but you should also be thinking that this may be a transformative year and that if more companies are going to go down this route then this is your opportunity to weigh in on that and shape things.
Has the pandemic affected your ESG reporting?
We are getting close to publishing our ESG report and what you’ll see this year is that we are going to talk about Covid-19 in that report. Part of the reason I have delayed it is because I’ve wanted to talk about [the pandemic] and our response from a human capital-management perspective and in terms of our customers and communities. I think it’s very important for our investors to be able to see how we responded. We have materials on the website but to bring it all together in one [place] while talking about ESG was important to me.
We engage Gallup to survey our associates regularly and this spring we introduced two Gallup pulse surveys related to Covid-19. One was about [the company’s response to] Covid-19 and the other was about returning to the ‘new normal’. We want to make sure our associates have a voice.
We’ve done things like paying premium pay bonuses for more than 9,000 personnel, we’ve had free Covid-19 testing with doctor approval, enhanced facility cleaning and coaches on calls [to help] team leaders with associate engagement. We’ve had about 10,000 associates, or roughly half of our workforce, working remotely. The decisions we have made are in line with our strategic priorities and our values, which include building the best team and doing what’s right.
What metrics might you use for reporting around Covid-19?
One metric would be results from the Gallup polls we conducted among associates so that we can understand what’s going on with the workforce. Also disclosing how many people are working remotely and how many people are getting the premium pay, those types of things.
How has the pandemic impacted your engagement program?
The investor relations team continues to have engagement calls. It’s slowed things down a little for us because I would normally have in-person engagement with investors at events such as the Harvard corporate governance forum or the Stanford institutional investors forum, and some of the March events were canceled.
When you have in-person engagements, you can sit down with investors and talk to them, and I don’t think this virtual engagement is the same. You don’t have the same kind of separate, stand-alone [interactions].
Usually with our in-person engagement we would bring investors to the board – last year we had a dinner with investors. Unfortunately you can’t have those personal engagements [this year] but what I am contemplating – now that people have become better with the technology – is that when we do our usual summer investor calls we make them virtual so we can at least see the people. If that works well, we may change things in the future.
How might the pandemic affect the board’s long-term thinking, and how can you best help the board evolve its thinking?
I think it’s all about trying to be a thought leader, trying to figure out what the risks and opportunities are and going outside of day-to-day issues. This is all part of strategic thinking about where the company needs to be, and thinking of where things can go wrong and preparing for that. Any well-managed company is constantly thinking about crisis management.
It’s like when we were considering moving to a virtual meeting. My job is to think about how things can work smoothly so there’s not some kind of panic. My job is to challenge myself to think about where we need to be. And that’s all about having good governance in place.
This article appears in the summer issue of Corporate Secretary.