Recent Columns By Former NIRI CEO Louis Thompson

Louis Thompson Jr. is the former president and chief executive officer of the National Investor Relations Institute, where he served for more than two decades. An adviser to the SEC and the NYSE, Thompson is currently serving a second term on the NYSE Individual Investor Advisory Committee. A former member of the Harvard University New Foundations Working Group on corporate governance, Thompson's most recent columns for Compliance Week are below:

Pre-empt Binding Say-on-Pay With Real Reform

February 14, 2012

If the United Kingdom adopts binding say-on-pay votes, can the United States be far behind? There's a history of business regulation taking root in Britain and Europe and then migrating to the United States. If companies want to head off that development, says Columnist Lou Thompson, they will need to make some voluntary reforms on executive compensation.
 

What the (Near) Future of Shareholder Communications Holds

January 24, 2012

As we look ahead at what information best-in-class companies will communicate to shareholders in the coming year and the methods they will use to communicate it, it's worth a quick review of innovations tried last year that met with only marginal success or outright failure. Columnist Lou Thompson looks at fifth analyst calls, virtual annual meetings, sustainability disclosure and more.
 

The Downside of Crowdfunding

December 13, 2011

In the name of job creation, Congress passed a series of bills that make it easier for small companies to raise funds without registering with the SEC and to use social media sites to do it. But could it open investors up to fraud and manipulation? Inside, Columnist Lou Thompson looks at the dark side of "crowdfunding," and why it might not be such a hot idea.
 

Preparing for Proxy Season 2012

November 22, 2011

Speaking of proxy season, Columnist Lou Thompson covers some of the trends he expects to play out in the coming year. He says the pendulum continues to swing toward greater involvement by shareholders in the proxy process. Also inside, the latest thinking on shareholder meetings and tips for conducting shareholder outreach.
 

It Pays to Get on Board the ESG Bandwagon

October 11, 2011

More companies are reporting their corporate sustainability efforts using the Global Reporting Initiative framework, but the portion of the Fortune 500 doing so still stands at 20 percent—far less than their European peers (45 percent). A recent survey that finds GRI reporters far outperform non-reporters, however, may entice more companies to join the crowd. Inside, Columnist Lou Thompson makes the case for why they should.
 

How Storytelling Fills in the Lines of Regulatory Ambiguity

September 20, 2011

Each new enforcement action brings a new set of characters and plot twists, as the case unfolds and lessons are learned about compliance errors. But as Columnist Louis Thompson observes, they also build a living library of compliance tales that bring rules and regulations to life and illustrate their complex concepts.
 

Why You Should Be Talking to Hedge Funds

August 23, 2011

The Dodd-Frank Act includes a number of provisions intended to lift the shroud of secrecy that has cloaked the hedge fund industry since it began decades ago. But despite new rules, details on their investment strategies will remain largely hidden. Inside, Columnist Louis Thompson examines how to get at this information and why it's more important now than ever.
 

Are You Ready for the ESG Reporting Revival?

July 19, 2011

When the recession hit a few years ago, many companies put on hold plans to strengthen reporting on environmental, social, and governance issues. Activist shareholders, consumed with risk-management and compensation issues, went along. Inside, Columnist Lou Thompson finds that concerns over ESG reporting are back.
 

Navigating Reg FD in a Hyper-Connected World

June 21, 2011

Social media could prove to be a powerful tool for communicating with shareholders, as it has for marketing. But using social media for investor relations raises an entirely different, and more immediate, set of regulatory risks, including the risk of violating Regulation Fair Disclosure. Inside Columnist Lou Thompson looks at the perils and some strategies to guard against them.
 

Speaking Truth to Power—and Living to Tell About It

May 17, 2011

Speaking out against corporate wrongdoing can be hazardous to your career, even at companies that say they foster a strong culture that encourages people to blow the whistle or come forward with bad news. Inside, Columnist Lou Thompson provides some pointers on how to speak truth to power and live to tell about it.
 

Is It Time to Add a Fifth Analyst Call?

April 19, 2011

A group of large investors is pushing companies to make some members of the board and management available before the annual meeting to answer questions on corporate governance during a "fifth analyst call." Some companies worry that such talks could risk Regulation Fair Disclosure violations. Inside, Columnist Lou Thompson offers suggestions for how to make the most of a conference call on governance.
 

Avoid the Dynegy Dilemma; Reach Out to Shareholders

March 15, 2011

It's one of the most bizarre examples of a corporation's failure to convince shareholders to follow management's recommendations: Dynegy's two failed merger plans and the mass resignation of its leaders. Inside, Compliance Week Columnist Lou Thompson reviews the missteps that happened along the way and offers tips on how to avoid a similar fate.
 

Time to Clamp Down on Access to Non-Public Information

February 15, 2011

The SEC has widened its nets on insider trading with its probe of expert networks. Inside, Columnist Louis Thompson looks at what it means for compliance officers. He also examines a questionable roadshow arrangement that could be next on the list of practices that are drawing attention from regulators.
 

Time to Rev Up Shareholder Outreach

January 19, 2011

With "say on pay" and plenty of other changes in the works, this proxy season could be a little more stressful than usual. Smart companies are getting a jump and reaching out to large investors. Inside, Columnist Lou Thompson provides some tips on conducting effective shareholder outreach.
 

Behind the Resistance to Virtual Shareholder Meetings

December 14, 2010

More companies are considering making the move to a virtual annual shareholders' meeting. But if you dare, step carefully. Some companies that have made the move have run into a massive backlash from shareholders. Columnist Lou Thompson provides some insights on the right way to leverage online capabilities and some standards for going virtual with the annual meeting.
 

Go Beyond Compliance for Better Investor Communication

November 16, 2010

With the Securities and Exchange Commission proposing a slew of changes to proxy disclosure and shareholder communications practices based on the Dodd-Frank Act, it’s time for companies to adopt a “lean forward” approach to investor communications, particularly in the proxy statement. Yet, as companies prepare for the 2011 proxy season, they seem to be taking a “lean back” approach to compliance with the proxy disclosure rules and Dodd-Frank provisions—looking to see what peer companies are doing rather than taking the lead to provide better information to their investors.
 

Too Much Disclosure, Not Enough Information

October 19, 2010

U.S. corporations are growing more concerned that federal lawmakers and regulators have hijacked the traditional corporate disclosure process to fulfill a social agenda. Investors, meanwhile, are being smothered with volumes of data, much of it virtually useless for making investment decisions. How did we get here?
 

What’s Driving Shareholder Anger and Activism

September 21, 2010

Two emerging trends are likely to have a dramatic influence on investor and market behavior. One is the unbridled advance in technology. The other is the will of a majority of commissioners at the Securities and Exchange Commission and of lawmakers in Congress to give more power to investors.
 

How Governance, Investor Relations Will Combine in 2011

August 17, 2010

As public companies prepare for the 2011 proxy season, investor relations officers and other senior executives will need to re-invent themselves. All will confront a greatly enhanced world of shareholder communications stemming from the Dodd-Frank Act, the SEC’s new proxy disclosure rules, and its proposed “proxy plumbing” reform bound to streak across the stage in 2011.
 

The Risk of Losing the Retail Investor

July 20, 2010

Imagine you’re an individual investor with shares in Diebold, the maker of ATMs and security systems. You’ve just sat down at the company’s annual shareholders meeting on June 2. Back stage, just minutes before taking the podium, CEO Thomas Swidarski learned the company’s share price has dropped 30 percent—in six seconds! You turn off your Blackberry so you’re no longer connected to the outside world.
 

Breaking Down the Risk-Assessment Process

June 15, 2010

The Compliance Week 2010 conference provided a series of “conversations” on risk assessment that revealed how far along leading companies have come in implementing that process, and gave some valuable insight into how executives can improve the information that boards of directors need to exercise their risk-management role.
 

Intel and Monsanto, Two CSR Pioneers

May 18, 2010

This is the third in a three-part series on corporate social responsibility. My first column, “The Value of Tailoring a CSR Strategy to Investors,” focused on the growing number of institutional and sovereign wealth funds looking for good companies with authentic CSR or sustainability programs. Last month’s column, “Time to Get Started on Your Sustainability Strategy,” explained how to create a sustainability program.
 

Time to Get Started on Your Sustainability Strategy

April 20, 2010

Last month’s column, “The Value of Tailoring a CSR Strategy to Investors,” described the growing phenomenon of institutional investors’ and sovereign wealth funds’ desire to invest in companies that have developed credible sustainability strategies and practices. Sustainability encompasses corporate social responsibility (CSR) and environmental, social, and governance (ESG) practices and performance.
 

The Value of Tailoring a CSR Strategy to Investors

March 16, 2010

Why should companies that provide their traditional institutional investors a strong balance sheet, reliable cash flow, management credibility, an effective business strategy, and growth in earnings per share care about going beyond that to develop a sustainability strategy that attracts socially responsible investors? This column is the first of a two-part series that will answer that, examining what is going on in the world of investor interest in Environmental and Sustainability Governance (ESG) and Corporate Social Responsibility (CSR)—components of a sustainability strategy.
 

Getting Ready for the 2010 Proxy Season

February 17, 2010

Are you ready for the 2010 proxy season? Companies are faced with new rules for expanded disclosure of executive compensation and director experience in the proxy statement. They have more issues that will come under more scrutiny from more people, be they activist investors, proxy advisory services, pension and union funds, or the media. Here’s what you need to consider to be prepared for the proxy season ahead.
 

Making 2010 a New Start for Shareholders

January 20, 2010

The past decade wasn’t kind to America’s investors. So why not turn the table and make the 2010s the “decade for the shareholder”?
 

Recapping 2009 Investor Trends; Previewing 2010

December 15, 2009

Corporations saw significant change in 2009 in how they communicate with shareholders, thanks to a confluence of emerging trends: changes in how the markets work, regulations affecting corporate disclosure and the proxy process, and an upsurge in investor activism. Companies need to take stock of what’s happened and reconsider their communications strategies going in 2010 and beyond.
 

Preparing for the Big Headache of Spring 2010

November 17, 2009

What lies ahead for the 2010 proxy season and annual meeting, and why should you care? Simply stated, public companies will face the greatest challenges that most have experienced in recent memory.
 

Digital Media Challenges Shareholder Communications

October 20, 2009

The world of shareholder communications is in a “Twitter” about what to do with the new social media. To tweet, or not to tweet … that is the question. As most Compliance Week readers likely know, the dominant social media platforms (today) include blogs, Twitter, Facebook, LinkedIn, myriad chat rooms, multimedia sites such as YouTube, and even services such as RSS feeds and Mobile Investor.
 

Greater Public Disclosure, Other Tips to Dodge Reg FD

September 22, 2009

The Securities and Exchange Commission provided some long-overdue guidance in August about proper interpretations of Regulation Fair Disclosure—the first interpretive guidance for Reg FD since the rule went into effect in 2000. It’s a must-read for investor relations and corporate communication officers as well as corporate counsel.
 

Cloaked in Mystery, ETFs Arrive as Investor Kingpins

August 18, 2009

The world of investor relations began shrinking several years ago with the decline of sell-side analyst research. Today, the game changer is the buy-side's growing move away from analyzing individual companies in their portfolios and toward the use of asset management. This should alarm any investor relations officer, senior managers, and boards of directors.
 

Your Guide to Creating a World-Class IR Function

July 21, 2009

A Fortune 500 mining company client recently asked me what constitutes a “world-class” investor relations function. That’s a question I periodically pondered during my 24 years as CEO of the National Investor Relations Institute, certainly, but I had never explored it in any formalized manner.
 

The Time Has Come to Embrace Sustainability

June 16, 2009

Corporate sustainability is here to stay. The real question is how long will it take for the C-suite and boards of directors to adopt a business approach that goes well beyond traditional means of creating and developing corporate value.
 

Shareholder Value and Your Sustainability Goals

May 19, 2009

The long-accepted corporate goal of maximizing shareholder value got a real slap-down when corporate icon Jack Welch recently told a reporter: “Shareholder value is the dumbest idea in the world.” What made the comment astonishing was that Welch was a proponent of shareholder value for more than 25 years, during which time General Electric exceeded analysts’ consensus estimates every quarter for longer than a decade.
 

Former Trillium CIO Talks Good Investor Relations

April 21, 2009

This month, Compliance Week Columnist Lou Thompson is publishing excerpts of a Q&A interview he conducted with Sam Jones, the recently retired chief investment officer at Trillium Asset Management. While at Trillium, Jones was a pioneering advocate for socially responsible investing and emerged as a leading proponent of good governance practices now in the mainstream.
 

From Websites to Wire Services: Disclosure Wars

March 17, 2009

Pull your chairs up to your computer screens, everyone: A battle is brewing online about the correct way to disclose material, non-public corporate information to investors.
 

Blogs: If Used Properly, an Investor-Friendly Tool

February 18, 2009

Investor relations may finally be entering the world of the blog, an Internet communications concept that began some 10 years ago. Blogs are a wonderful tool with great potential, so of course Corporate America has been late to adopt them. But finally, we’re seeing progress.
 

Questions Surface Around SEC’s IFRS Roadmap

January 20, 2009

The freight train known as International Financial Reporting Standards for U.S. filers is gaining momentum—or is it?
 

Say-on-Pay Looms; Cos Should Seek Shareholder Input

December 16, 2008

Most of Corporate America already knows that investors clamoring for more say over executive pay will be one of the big battles in the coming proxy season. Wise corporations should instead be bracing for exactly what investors will say when they have the chance.
 

Transparency, Disclosure Should Be Top SEC Priorities

November 18, 2008

One has to wonder if the old Shakespearean saying “timing is all” will become a guiding factor in which direction the Securities and Exchange Commission will go with a new administration and Congress.
 

Advanced IR Section Crucial to Corporate Websites

October 21, 2008

Last June, the director of the Securities and Exchange Commission’s Division of Corporation Finance, John White, addressed the annual conference of the National Investor Relations Institute. His message: “Communications is a big theme for the SEC. Companies, more and more, are using corporate Websites to provide information that we require. We at the Commission are on board with this, and we want to encourage it.”
 

Investor Relations Fixes in a Complex Economy

September 23, 2008

U.S. corporations are facing the most challenging environment for shareholder relations and communications since the recession of the early 1990s. Without question, the current economy is causing some companies to suffer from a “bunker mentality”—instead of going on the offense to tell their investors what their strategy is to deal with an uncertain economic environment, they close up, follow their course unswervingly, and hope for these trying times to pass.
 

Reforms That Favor Non-Financial Data

August 19, 2008

Significant public policy groups are jumping on a bandwagon to make corporate reporting more meaningful and useful and in a form that investors (institutional and individual alike) can digest in making better investment decisions. In the lead has been the Securities and Exchange Commission’s Advisory Committee on Improvements to Financial Reporting, which submitted its final report to the SEC last month.
 

Learning From This Year’s Proxy Season

July 22, 2008

This is not just another review of the recent proxy season for lessons learned. Instead, it’s a wake-up call for Corporate America that a new brand of activist investor has arrived on the scene that may well call for a change in how boards communicate with their major investors.
 

XBRL Meets Modern Investor Relations

June 17, 2008

Three years ago, the Securities and Exchange Commission introduced a financial reporting “tagging” concept called eXtensible Business Reporting Language (XBRL). Seventeen pioneers—including 3M Company, Altria Group, Microsoft, Pfizer, and Xerox—volunteered to file their financial statements using XBRL, to see what this new technology could do.
 

New CSR Paradigm: Share the Wealth, Blame

May 20, 2008

Corporate America is shifting from a business model where the shareholders who take all of the risk reign supreme to one in which shareholders share the social value limelight with other constituents: communities, suppliers, laborers, environmentalists, and the public. This is all occurring under the rubric of corporate social responsibility.
 

When Full Disclosure Still Isn’t Enough

April 22, 2008

Since 2001, most publicly held companies have viewed their legal disclosure obligation through the lens of Regulation Fair Disclosure. Reg FD was designed to stop the disclosure of material, non-public information—particularly earnings guidance—to a select group of analysts or investors and to level the playing field in disseminating material information.
 

Ready for Online Activism? I Didn’t Think So

March 18, 2008

Just as we are observing the power of the Internet in the current presidential primaries, Corporate America is about to experience a wake-up call regarding the same phenomenon. But in the corporate context, the campaigners are largely activist investors who will use the various Internet and social networking tools to win their proxy battles.
 

Below the Iceberg of Better Reporting

February 20, 2008

The Securities and Exchange Commission launched a much-needed initiative last year in creating the Advisory Committee on Improvements to Financial Reporting. The SEC staff will now review the Committee’s draft decision memo (you can see coverage of the memo in the “Rules and Proposals” section of the magazine this month) and make recommendations to the SEC for implementation.
 

Shareholder e-Forums: Useful Tool or Pitfall?

January 15, 2008

You probably overlooked this, but the Securities and Exchange Commission is trying something new with its latest amendments to federal proxy rules: encouraging public companies to establish online shareholder forums.
 

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