Directors and stockholder engagement: what path to take?
By Ed Batts
For many decades, independent directors in most public companies generally avoided face-to-face interaction with stockholders. At most, large stockholders would receive a visit from management on a swing through New York or occasionally a couple of other east coast cities with a high concentration of the investing community. And the odd gadfly stockholder could sometimes intercede with a question at an annual meeting where directors may make an appearance. In many respects, board members remained insulated from direct pressure, save for the occasional hostile attempt in an M&A situation or the like.
This suited companies for a number of reasons. Independent board members often have other responsibilities, and thus may not want to devote the additional time to stockholder interaction. These directors also may prefer that management act as a filter on communications — of course, management may prefer the same as well…
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