The Shareholder-Director Exchange (SDX), a group of large investors, corporate lawyers and board members who have joined together to encourage engagement between shareholders and directors, has sent letters to the directors and corporate secretaries of all Russell 1000 companies encouraging them to promote better shareholder-director relations.
The investor members of SDX, which include CalSTRS, JPMorgan Chase and others, have asked the Russell 1000 companies to ‘consider adopting and clearly articulating’ a policy to improve engagement between shareholders and directors.
‘We believe US public companies, in consultation with management, should consider formally adopting a policy providing for shareholder-director engagement, whether through adoption or endorsement of the SDX Protocol or otherwise,’ the SDX letter reads. ‘Several prominent US companies are already following this path of engagement and disclosing their engagement efforts; we believe other public companies should follow their lead.’
Included with the missive is the 10-point ‘SDX Protocol’, which outlines a plan for companies to improve shareholder-director relations. Suggested steps include identifying topics for engagement, selecting participants, determining how to engage, reviewing and revising approaches to engagement, and several others.
‘In light of structural changes in the US shareholder base, it is prudent for corporations – at both the management and board levels – to enhance their relationships with investors,’ asserts James Woolery, co-chairman of SDX, in a press release.
‘SDX is providing critical infrastructure to facilitate productive shareholder-director communication, advancing engagement from a desirable idea to a practical strategy that corporations can execute.’
The SDX, which was formed earlier this year from a working group of 17 institutional investors and directors, also announced it had added four new members, including CalSTRS corporate governance director Anne Sheehan, State Street Global Advisors governance chief Rakhi Kumar and Ally Financial Services director Mayree Clark. Gail Deegan, a director of EMC Corp and iRobot, also joined the body.
