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Over on Cooley’s “Governance Beat”, Broc recently blogged advice from in-house professionals on effective shareholder engagement practices.  Here’s an excerpt with some of their recommendations:

– “To be an active listener. On some of these calls, you often go in with an agenda – particularly if you have specific things you’re trying to address on the call or if you’ve got your chair on the phone and they have things that they want to talk about. I think it’s critical to pause and hear what the investors are saying. Are you responding to what is being said as opposed to just sticking to the script that you went in with?”

– “Recognizing the differences among shareholders. An active manager may have very different interests and priorities than a passive manager. Speaking to an active manager as if they are a passive one is not going to go over well.”

– “Be very precise with your language. You may be having a terrific engagement and suddenly one thing is said that gives the impression that you’re not in tune with good governance practices. Recognize if that happens and rectify it. Every word matters. Having said that, tone is key and if you’re new to engagement, make it clear you are just dipping your toe into the engagement waters. You will find many investors to be polite and forgiving.

Other recommendations include the importance of keeping management in the loop about the results of engagement, being willing to take advice from your investors, and using shareholder engagement as part of your disclosure drafting process.

– John Jenkins