June 1, 2021

Lead Director as Shareholder Liaison: Lessons From Engine No. 1

This HLS blog from Nell Minow predicts that we’ll see more ESG-focused proxy fights in light of the results last week at ExxonMobil. Here’s her concluding recommendation:

Every board should have a committee that oversees investor communications and lead directors should be liaisons for shareholder concerns. They should expect a lot more interest from shareholders in the quality of the board, with emphasis on independence that goes beyond resume disclosures. Wise boards will solicit suggestions from investors and make sure that all directors know that their obligation as fiduciaries is to shareholders, not executives, and that their actions make that message clear to shareholders as well. Engine No. 1 is the first of a new kind of activists; its success makes it clear it will not be the last.

Liz Dunshee