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.
In a recent speech to the National Association of Corporate Directors, SEC Chairman Mary Schapiro chided boards for considering such an approach. “We have been told that some board members were advised that they should keep the new information to a minimum. I disagree. I urge board members to engage with those who draft the proxy statements to make sure that this disclosure accomplishes its goal of better communicating this key information to shareholders,” she suggested.
