Boards should never be caught not knowing what their shareholders think. Indeed, the SEC has pledged to take a hard line on companies' compensation and governance disclosures this year, demonstrating its support for shareholder access to the information they want.
In this period of intense governance scrutiny, boards must assert their independence and authority by communicating directly with their shareholders. It no longer is enough for boards to communicate only through the legally required proxy, 10-K, and 8-K documents. They must do more to show they are representing owners and holding management accountable.
Engaging directly with shareholders is not work that comes naturally to boards. The boards that turn to lawyers for help or believe that Regulation FD both prevents and protects them from shareholder engagement will be sadly mistaken.
Just as a board hires its own compensation consultant, the board needs to engage the services of a communication consultant as it works through its specific shareholder communication needs and share-holder engagement opportunities.
Turning to management resources...