A recent Wilson Sonsini memo offers advice for boards and management on best practices for shareholder engagement and dealing with shareholder activism. Here’s an excerpt from the memo’s discussion of how to conduct a meeting with investors:

The company’s representatives should conduct the meeting and drive the discussion. Shareholders want to engage directly with the decisionmakers, so top management or a board member should be the company’s primary speakers. Throughout the meeting, the company will want to show that its participants have a strong command of the issues facing the company.

Although not mandatory, executives generally engage most in discussions related to their functional areas. For example, the CEO would concentrate on questions and discussion related to strategy and “big picture” items, the CFO would focus on financials, and the General Counsel would focus on governance. Throughout the meeting, it is important for the company’s participants to demonstrate competence, alignment, and engagement.

Approach the meeting as a discussion and not a negotiation. This means listening actively and soliciting feedback, and not being dismissive, defensive, or confrontational. It is natural for there to be issues on which the company and the shareholder disagree, but the company’s focus in the meeting should not be on trying to change the shareholder’s mind. Rather, the goal is to clearly and unemotionally communicate the company’s position, reasoning, and value creation strategy while also building credibility with shareholders.

Other engagement-related topics addressed by the memo include when to engage with shareholders, whether to engage with known activists, how to prepare for a meeting with shareholders, what legal issues to keep in mind, and what to do after engagement.

– John Jenkins