Developing a guide to good engagement practice

Questions for consideration in developing guide to good engagement practices. 

The starting point for more productive meetings is clarity in the minds of all participants about:

  • The purpose of the meeting or meetings
  • With whom the communication is to take place
  • What is on the agenda
  • What preparation is needed
  • How long and how frequent the meetings should be.

Companies

In preparation for engagement meetings the company should have a clear strategy for engagement, which answers the following questions:
Purpose

  • What, overall, is the company seeking to gain from its engagement?
  • Will all its objectives be achieved by having a meeting?
  • What other methods of communication will enhance engagement?
  • Will the objectives all be achieved by having one design and attendance at the meeting?
  • Does the company need to have separate plans to deal with the regular pattern of communicating results, and progress against the business model and strategy, and the less regular, but no less important meetings to communicate the company’s approach to board effectiveness and composition, company culture, risk and reputation?


Some meetings are called by the company and some by the investors. But even where the company has not initiated the meeting, it should still be clear on these points.


Participants

  • Who is on the shareholder register, the proportion of shares held, and what is their level of interest in engagement?
  • When it is appropriate to meet one-to-one, and when are joint meetings with several investors appropriate?
  • Which people and functions from the investor perspective would the company like to see at the meeting? (For example when should both governance specialists and portfolio managers attend?)
  • Has the company discussed some of these questions in advance in order to ensure the right attendance for the purpose?

Preparation

  • Who is the primary point of contact for investors when dealing with company management and NEDs?
  • Do you prepare for the meeting far enough in advance to set an agenda?
  • What was discussed at previous meetings for information on the shareholders, topics discussed and any conclusions?
  • Have you requested questions or topics for the agenda from the investor side?
  • Are you willing and able to cancel a meeting if this preparatory work suggests that there is no point in it?

Agenda, minutes and follow up

  • Should investment and governance issues be discussed at the same meeting?
  • What specific questions are to be discussed, and with what desired outcomes?
  • Do you take notes at the meeting for information and for circulation to all parties post-meeting?
  • Do you check with meeting participants and seek feedback on the quality of the meeting?
  • How many meetings should be held and when should they be held – a strategy for shareholder engagement?
  • How long should the meeting be – does this need to differ between: meetings to encourage engagement and getting to know the various parties, and results meetings?
  • And according to whether it is intended to put on a presentation or have a discussion?
  • Should 90 minutes be allowed for routine results meetings, to ensure that there is sufficient time for additional items to be raised?

Institutional investors and shareholders

Purpose
  • What, overall are you seeking to gain from your engagement?
  • Will all your objectives be achieved by having a meeting?
  • What other methods of communication will enhance engagement?
  • Will the objectives all be achieved by having one design and attendance at the meeting?
  • Or are your stewardship and engagement objectives better served by separating the regular pattern of results meetings, which cover progress against the business model and strategy, and the less regular, but no less important, meetings to understand the company’s approach to board effectiveness and composition, company culture, risk and reputation?
  • Some meetings are called by the company and some by the investors. But whether or not the investor has initiated the meeting, it should still be clear on these points.


Participants

  • Bearing in mind Stewardship Code Principle 5 which calls for collective engagement where appropriate, under what circumstances do you favour collective engagement with other shareholders?
  • Do you have the right people to achieve a meaningful discussion on key topics?
  • How do you ensure that people of appropriate skill and seniority attend to achieve the objectives of each meeting and each type of meeting? (For example when both governance specialists and portfolio managers should attend?)
  • Have you made clear to the company your approach to participation and have you asked them if they think your approach makes sense in the light of the purpose of the meeting in question?

Preparation

  • Who is the primary point of contact for investors when dealing with company management and NEDs?
  • Do you prepare for the meeting far enough in advance to agree an agenda with the company?
  • What issues were raised at previous meetings and what commitments made?
  • What written material do you need to have studied to be ready to engage effectively?
  • Does this include the Report & Accounts or parts thereof?
  • What other research and analysis?
  • Have you requested questions or topics for the agenda from the company side?
  • Are you willing and able to cancel a meeting if this preparatory work suggests that there is no point in it?

Agenda, minutes and follow up

  • At which meetings should there be a joint discussion of both investment and governance issues?
  • Do you seek feedback from the company so that you can better understand if the meeting made good use of everybody’s time?
  • Do you keep a note of the record of proceedings? How do you follow up to see if action is being taken on points about which you are concerned?

Frequency and length

  • How long and how frequent should the meetings be to achieve your stewardship objectives, taking account of your resource limitations?

Read the next section:
Feedback forms for investor meetings

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