There’s no denying it: we work in a results-driven world. Financial results, investment return, engagement outcomes, meeting results. In fact, this is a good thing. Positive results we’ve contributed to are one of the things that make our work feel valuable (and shock horror, actually gets it valued sometimes as well!).

So how or why would we create a situation where we might miss out on benefiting from a positive result? Here’s a working example for 2014.

We are seeing a flurry of last-minute engagement between companies, shareholders and, in some cases “shareholder representatives” on remuneration policy. With so much uncertainty (some of it hyped) about how companies and their investors will be approaching remuneration policy votes this year (ergo, what will the results of these votes be?), it follows that that question will be subject to no small measure of scrutiny. 

There’s nothing wrong with engagement of course, it’s a vital aspect of a positive ownership strategy. It also follows that an obvious result of a successful engagement should be support for management. But why limit that positive impact to the votes of those who are “in the know”, by issuing an inadvertently selective briefing?

With so much debate on the influence of proxy analysts at the moment, there’s a great opportunity for issuers to positively reinforce direct communication and engagement with their owners rather then their service providers. Where the  outcome of an engagement is an announcement posted on an obscure, disconnected web page rather than announced to the market, the positive result (i.e. support for management) is lost on those shareholders who aren’t aware the information is available to them and won’t happen to stumble across buried data because, especially in the middle of peak season, they’re unlikely to have time for casual browsing.

A formal Regulatory Information Service announcement to the market ensures all shareholders are fully informed and avoids discrimination against shareholders who weren’t apparently party to the engagement which has led to the announcement. Otherwise, for shareholders who wish to ensure they are fully informed, there’s an inference that they must be in touch with the representatives who brokered the engagement. This puts those representatives (who frequently include the so-called proxy “advisors”?) front and centre of the process at the expense of your actual shareholders, and gives them the credit when in fact the impetus may have come from their clients, your shareholders.

So we’re not saying to issuers ‘don’t engage for fear of unequal treatment of shareholder’s access to information’. It’s quite simply that if an announcement merits being put up on your web site, all shareholders deserve (and expect) to be notified. That way, management can maximise the positive impact of the announcement. It’s not the announcement that’s most important, it’s making sure you maximise the effect of the announcement on investor decisions by ensuring they get to know about it.

Or, as Bananarama aficionados might put put it “It Ain’t What You Do It’s The Way That You Do It “. That’s what gets results. 

Last Updated: 29 January 2014