Discipline, innovation and transparency
GE’s approach to shareholder engagement is both disciplined and innovative. Each summer it compares its output with that of other Dow 30 companies, looking for trends and opportunities to explore. In the fall, members of the GE governance team meet in person and on the phone with 50-60 of the company’s largest shareholders, soliciting feedback on GE’s board, compensation program and governance practices.
The feedback is then consolidated in the winter and shared with GE’s board, often resulting in recommendations for governance and proxy disclosure improvements. In the spring, GE’s team engages in follow-up conversations with the firm’s major shareholders ahead of the annual meeting.
To supplement this already high-touch approach, last year the governance team started inviting major institutional shareholders to meet GE’s independent directors without senior management present.
‘We view investor engagement as an important part of explaining the story of what GE is doing,’ says Brian Sandstrom, executive counsel for corporate, securities & finance. ‘Our outreach process is really integrated with the disclosures we put out. Our investors need to see the connection between what our strategy is and what the board does.’
To shine a light on the board, GE’s governance team revamped its proxy website. The lead director now features in five videos, outlining the role of the board in several key decisions.
The website also provides information on the regularity and focus of the board’s two-day meetings, insight into upcoming focus areas for the board and its committees, and information about how the board actively refreshes itself.
In its quest to be responsive to shareholder feedback, GE’s team focuses on consolidating its work into simple, digestible messages. ‘We recognize that most people might not have time to dive through 350 pages of disclosure,’ Sandstrom says.
This year GE launched the first ever integrated summary report, taking information from the company’s 10K, proxy statement and sustainability website and boiling it down to a 65-page graphics-heavy report.
In addition, it refined the annual meeting solicitation to focus investors on the most crucial new governance and compensation developments. It sent a ‘top 10’ list by email to guide investors’ review of the proxy and provided the option of a follow-up meeting for anyone who had questions.
‘Many of our investors were having no significant issues and didn’t need to talk to us each fall and spring,’ says Sandstrom. ‘While they appreciate the option of a call, they are more appreciative of getting 15-20 minutes of their time back.’