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As I blogged last month, SEC Chair White delivered a speech on disclosure reform recently. There really is some interesting commentary from a variety of investors in this Fortune article about whether there is a “disclosure overload” in SEC filings. Most of them say “no”…

Meanwhile, SEC Commissioner Gallagher has weighed in with his thoughts on disclosure reform, as noted in this Davis Polk blog…

Speaking of “what’s material?,” the U.S. Supreme Court has set oral argument for March 5th in Halliburton v. Erica P. John Fund (No. 13-317), the case that may upset the Basic v. Levinson (fraud-on-the-market) applecart…

Survey: Board-Shareholder Engagement

This recent investor survey by PwC presents some interesting findings, including that 45% of investors prefer engaging directly with directors (see pg. 11). In comparison, here are the key findings from this recent NIRI survey:

– Majority of survey respondents (60%) state that their companies do not permit board members to engage directly with shareholders (defined as in-person or via telephone).
– Within companies that do allow direct communication, 65% state that any board member may speak directly, while 35% state that only certain board members may speak directly to shareholders.
– Within companies that do allow direct communication, 57% indicate that a member of management is not required to be present during these discussions.
– In general, as market cap increases, so does the likelihood that only certain board members may speak with shareholders and that management’s presence is required.
– Companies are only slightly more likely (43%) to facilitate indirect communication between boards and shareholders (defined as e-mail responses to questions via a third-party, such as the IR department or corporate secretary’s office), than direct communication (40%).
– The most likely venues for direct interactions between board members and shareholders are annual meetings (49%), through the proxy voting arms of institutional shareholders (11%), during non-deal roadshows/one-on-one meetings (9%), and at analyst days (8%).
– For those that reported board-shareholder contact within the last two years, the average number of direct communications over this period was nearly five.
– On average, one out of every five of these communications within the last two years was a result of activist or shareholder proxy proposal activities.

In our “Shareholder Engagement” Practice Area, we have a host of resources on directors involvement in the shareholder engagement process – as well as shareholder engagement generally including these checklists…

It’s Time is Now! IR Apps

Considering the popularity of apps, I have been surprised that few companies have apps for their investors. Now there is a simple solution that might make these omnipresent. In this podcast, Jeff Corbin of theIRapp explains how “theIRapp” works, including:

– What is the difference from an investor’s perspective of an IR app and IR web page?
– How much work is it for a company to keep an IR app updated with content?
– How much does your IR app cost?

– Broc Romanek