ICD Releases Guidance for Director-Shareholder Engagement

Mar 08, 2016
 
The Institute of Corporate Directors (ICD), Canada’s national association for boards and directors, today released guidance on director-shareholder engagement. The ICD endorses engagement in a way that complements management-led investor relations as an important means of fostering understanding that can help boards better oversee strong, innovative and growing companies.
 
To study the question of how best to engage with shareholders, the ICD convened an Advisory Committee consisting of Greg Boland, Ian Bourne, David Denison, Peter Dey, Eileen Mercier and Michael Wilson.
 
The ICD identified the need for more engagement, and guidance on how to go about it at its 2015 National Conference. Directors are facing increasing demands by investors for influence in the boardroom, sometimes extending as far as shareholder activism, as well as often conflicting opinions on the discharge of board responsibilities from investors, regulators, the media and other commentators.
 
“The ICD believes that boards should be leaders in this discussion, as befits their central role as stewards of their companies,” said Stan Magidson, the President and CEO of the ICD. “We at the ICD see a real opportunity for directors to engage shareholders in a meaningful way, which will build bridges, enhance mutual understanding and provide valuable insights.”
 
The result is a paper outlining six key recommendations tailored for the Canadian market:
 
  1. Know your most significant investors
          Boards should know their significant shareholders and their share positions
  1. Recognize the key benefits of engagement
          Engagement is about better understanding the other’s perspective
  1. Tailor a process that works for you
          Adopt a strategic approach
  1. Set topics of discussion
          Know what you’re talking about and what you can talk about
  1. Invite the right participants
          Get decision makers in the room
  1. Review and consider what you learn
          Consider the information you gain from your engagement
 
The recommendations are laid out in greater detail in the paper, entitled “ICD Guidance for Director-Shareholder Engagement.” It is available at www.icd.ca.
 
“We believe this paper is an important contribution to the discussion in Canada between companies and shareholders about how to work more constructively together for long-term success,” said Advisory Committee member Eileen Mercier, a former chair of the Ontario Teachers’ Pension Plan and an active director.  “The Advisory Committee and the ICD believe strongly that boards of directors that work with their management teams and engage with shareholders can play a role in opening up more effective channels of communication and help build mutual trust.” 
 

For media inquiries, contact:
 
Matthew Fortier
Vice President, Policy
Institute of Corporate Directors
Email: mfortier@icd.ca
Tel: 416-593-7741, ext. 246
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