Three fifths of directors speak directly to institutional investors
Communications by directors with shareholders has risen in the past year, although it’s still scattered, unco-ordinated and subject to widely differing views of etiquette and appropriateness.
Almost half of members of boards of directors say their company has no communications policy for them, or it has a policy but not a particularly helpful one. The lack of consistency is reflected in the disparate answers to PwC’s 2013 Annual Corporate Directors Survey.
Sixty-one percent of board members say they have communicated directly with institutional shareholders in the past 12 months, according to the survey. The same 61 percent indicate that their level of communication has risen or remained the same as the previous year.
One third say they have not communicated with institutional shareholders directly and they believe they should not do so, according to PwC’s survey of 934 public company directors, 70 percent of whom work for companies with annual revenue of more than $1 bn. Approximately 6 percent say they have not communicated with institutional shareholders but should start doing so.
Communications by directors with retail shareholders is much less frequent, with just 43 percent of directors saying they have undertaken such communication in the past year. A full half of directors say they have not communicated with retail shareholders and should not do so, while 6 percent say they have not but should.
Just over half (51 percent) of directors believe they should not communicate directly with the media while 24 percent extend this belief to company employees. Around 47 percent say they have communicated with the media in the past year and 70 percent say they have communicated with the company’s employees.
‘The evolution of corporate governance has caused directors to reconsider their relationships with stakeholders,’ says Mary Ann Cloyd, the head of PwC’s Center for Board Governance, in a press statement. ‘But while some boards believe direct engagement on corporate governance, executive compensation and director nominations is part of their role, others think director communications in these same three areas is inappropriate.’
