Shareholder engagement has become decidedly mainstream in recent years according to a new study by ISS entitled Defining Engagement: An Update on the Evolving Relationship Between Shareholders, Directors and Executives. The nearly fifty-page report, prepared for the Investor Responsibility Research Center Institute, provides a host of information about current practices and emerging trends among public companies. The study also looks at engagement from both the company’s and the investors’ perspectives.

Shareholder engagement is more effective outside of the spring proxy season, when companies and shareholders are swamped with deadlines and distractions. (See this Doug’s Note.) The best time is early fall, after everyone is back from summer vacations and before the holidays. That means that now is a good time to develop or update your shareholder engagement strategy, including, for example, issues to be prioritized, strategic goals, target shareholder identification, road show schedules, company participant decisions and updated contact information. The ISS study is an excellent way to benchmark your efforts against marketplace trends.

Some ISS General Observations…

Here are some of ISS’s general observations based on the study’s data:

• Overall engagement levels are considerably higher than in 2011 when the last study was done, even among companies that have not been targets of shareholder activism.
• Environmental and social issues are growing in importance among shareholders and are driving some of the increase.
• Engagements are generally perceived by both company and investor participants as being more successful than in the past, presumably because companies are getting better with practice.
• Lack of time is the biggest impediment to engagement.
• While international shareholder engagement has not yet become commonplace, it is a trend worth keeping an eye on.
• Overall engagements levels are likely to continue to trend upward.

Topics Covered in the Study…

To give you a flavor of the topics covered, here is a sampling of the Table of Content’s twenty-one headings:

• Engagement Frequency
• Methods of Engagement
• Engagement Participants
• Impediments to Engagement
• Trends in Engagement
• What Makes Engagement Successful?