The following are cryptic notes and a few photos taken at the 2013 Millstein Forum held June 24 & 25 at Columbia Law School. Be sure to check out the Forum’s photo gallery with links to other materials as well.
For the panel on social media the moderator was John A. Seethoff, Vice President and Deputy General Counsel, Assistant Secretary, Microsoft Corporation. (Wow, check out the interviews with each board member on Microsoft’s website. I’m impressed!)
Panelists were as follows:
- Rhonda L. Brauer, Senior Managing Director, Corporate Governance, Georgeson
- Richard J. Daly, Chief Executive Officer, Broadridge
- Christopher J. Garcia, Partner, Weil, Gotshal & Manges
We live in an attention deficit disorder (ADD) world but companies still need to talk to shareowners outside the proxy season. Reputational risks at stake. For directors, the most important thing to do is explain themselves to shareowners.
How do you get the biggest bang for the buck? Potash, for eample, had the compensation directors explain why they compensated the way they did. Ration use of directors. Others us online videos. Online forums or blogs are not a productive use of time. Still very hard to reach retail investors. Directors should be at the annual meeting to hear what shareholders have to say. Valuable to have compensation chair prepared.
One opinion: Companies generally have a “one voice policy,” so no social media policy is necessary. With more variations in the vote (both SOP and for directors themselves), directors are paying more attention. However, social media is mostly a distraction from more effective use of time.
Another: Online forums. 60% paperless proxies. Shareholders get to ask what directors are thinking. Allows management and board to survey. Boards should be talking to all your shareholders. Wian taketh online forums, you can take the temperature of shareowners. Can do a statistically valid survey of shareholders before you act (at least of institutional investors). Retail will vote more when prompted electronically.
Proxy Pulse, in conjunction with PwC. Pragmatic approaches to create a targeted message to retail who mostly vote with their feet. Generally vote 90% for management. Not overly complex. Stratify who you go after. More and more done through electronic media. They have linked words and phrases like “trust” in searches to guage public sentiment. Information goes to chair of governance committee who decides whether to take to full board. You can’t build a wall around the brand or reputation.
Notice and Access dramatically reduced response. Match customers with shareowners as people to survey. 60% of paper is gone. Tweeting. Urged caution and care. Power and perils. 144 characters isn’t a lot to explain your storey.
Regulatory overlay. We are in the first inning. Think Reed Hastings tweeting 1 billion hours of download. FD clarification. Compies need thought out policies with regard to use of social media. 3/4 of companies have no social media guidelines for directors. Delaware duties. Plenty of opportunity to be helpful or harmful.
The universe is very democratic but uninformed.
Information should be screened and summarized for the board. Viral aspect. Could be materially wrong but damaging. Dialogue. Not answering is like not listening. All questions should be answered.
My takeaway: We have a long way to go when a panelist can espouse the opinion that boards don’t need social media policies for directors because most have a one voice policy. The CEO speaks for the company. Really? What about employees, customers, suppliers, etc.? Don’t they all speak for/against the company? Read more: How To Tell Board Chairs Your “Digital Zipper” Is Down | Insurance Thought Leadership by Fay Feeney and New 2013 Q4 Whitepaper Public Company Use of Social Media for IR: Part 1 Twitter & StockTwits.
Defunct: Shareowners.org, MoxyVote.com. Still going: ProxyDemocracy, Sharegate — enables shareowners to submit questions and even draft proxy proposals to companies and each other… then gauge support based on expressed votes tied to number of shares owned.
- Brauer, Rhonda and David Drake. Conducting Effective Shareholder and Third-Party Outreach Programs. Georgeson: January 2011. Click here to view.
- Best Practices Working Group for Online Shareholder Participation in Annual Meetings. Guidelines for Protecting and Enhancing Online Shareholder Participation in Annual Meetings. Broadridge. June 2012. Click here to view.
- Conroy, Melanie and Christopher Garcia. Applying Securities Laws to Social Media Communications. Insights: The Corporate & Securities Law Advisor. Jan. 2013. Click here to view.
See also Millstein Forum 2013: The Impact of New Patterns of Corporate Ownership, 2013 Millstein Forum: Dual-Class Structures, Pro and Con and 2013 Millstein Forum: Beyond Shareholder Primacy.
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