I have long been a champion of shareholder engagement. Since as far back as the 1980s, I have believed that companies and investors alike greatly benefit from engagement; I even advocated for engagement by individual directors – a view that generated some strong adverse commentary from those in the corporate community who disagreed with me. It’s therefore extremely gratifying to me that what was a rare and often disparaged occurrence has become the norm. Even prestigious law firms that referred to director-investor meetings as “corporate governance run amok” now embrace the practice.
I also admit that, despite my disagreement with the principles behind say on pay votes, such votes have had the very positive unintended consequence of making engagement commonplace. In fact, there is so much engagement going on that some investors can’t find the time to meet with the companies they own.
So far, so good.
However, I believe that things may be going too far. I refer, specifically, to the new movement to have a “say on climate” vote at every public company’s annual meeting (or, as the corporate community increasingly refers to it, the annual general meeting, or AGM – as opposed to an annual “specific” meeting, I suppose). The vote would be similar to the say on pay vote – advisory, non-binding, and so on. I have not yet heard anything about a second advisory vote to determine how often a say on climate vote would need to be taken, but I would not be surprised to learn that it’s under consideration somewhere.
Continue Reading Say what???