New guidelines for corporate boards aim to prevent shareholder confrontations, proxy battles | Financial Post

A blue-chip roster of Canadian corporate directors and investors has crafted a roadmap laying out how boards should engage with their investors before unhappiness with how a company is being run leads to confrontation.

Against a backdrop of rising investor activism and proxy battles, the Institute of Corporate Directors is presenting six key recommendations Tuesday in a paper written by an ICD advisory committee.

“We feel that both shareholders and boards and their companies will benefit from a regular dialogue, thus short-circuiting the need for a confrontational situation that results from shareholders feeling that they are not being heard,” said Eileen Mercier, a former chair of the Ontario Teachers’ Pension Plan Board who sits on the ICD committee.

Any discontent that might lead to a public showdown, such as unhappiness over executive compensation or the re-election of a certain director, could be defused by ongoing engagement between directors and key investors, Mercier said.

via New guidelines for corporate boards aim to prevent shareholder confrontations, proxy battles | Financial Post.

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