Every year about this time calendar-year-end companies should begin to prepare for the coming proxy season by looking back on lessons learned this year, considering recent SEC rulemaking and evaluating latest governance trends. This year has been particularly active on several fronts, which makes advance preparation all the more important.

Here is a list of things to consider:

• Shareholder activists are pushing harder than ever for board representation, using both friendly and not-so-friendly methods of persuasion. Be prepared for both.
• Shareholder engagement not only continues to increase, but has become routine. It is an excellent way to figure out what is on the minds of your key institutional shareholders, how strongly they feel about it and what they might do next. Now is the best time to engage.
• Proxy access (no doubt the biggest issue this past proxy season) is not going away, even though the SEC is not actively pursuing rulemaking in that area at this time. As expected, the market is beginning to “standardize” the provisions most commonly found in proxy access proposals and supported by shareholder activist and advisory firms. (See this Doug’s Note.)
• Sustainability and corporate social responsibility continue to increase as points of emphasis in shareholder proposals and “voluntary” proxy disclosure. (See this Doug’s Note.)
• With the presidential election heating up, expect interest in political spending policies and disclosures to heat up as well.
• Although say-on-pay has dampened shareholder enthusiasm for executive compensation proposals, it has not gone away completely. Proposals now tend to be driven by specific circumstances or actions by the company (such as accelerated vesting, unusual bonuses or obvious disconnects with stock performance), rather than general unhappiness with compensation levels.
• Although companies don’t have to report pay ratio disclosure until their first fiscal year beginning on or after January 1, 2017, it is not too soon to begin evaluating the new rules and factoring the potential impact into compensation committee decisions and employee relations efforts. (See this Doug’s Note.)
• Several other SEC rule proposals are out there and warrant attention, including:
  • pay-for-performance proxy disclosure (see this Doug’s Note),
  • executive officer incentive compensation clawbacks (another Doug’s Note), and
  • proxy disclosure of a company’s stock hedging policy (here’s a third one).