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Here's How to Enhance Your Board Evaluation Disclosure

By Randi Morrison posted 11-15-2018 11:40 PM

  

In this recent Equilar C-Suite (pdf here) article: "Assess, Analyze, Address" (page 26), Donnelley Financial Solutions Director of Corporate Governance Services Ron Schneider discusses - with reference to specific examples (see T-Mobile: "Annual Board & Committee Evaluations" and Invesco: "Board evaluation process" & "Director recruitment") - how companies can enhance their proxy statement disclosure to promote investors' confidence in the quality and integrity of their board evaluation processes.

Importantly, enhancing disclosure in a way that is responsive to growing investor interest in this area doesn't mean disclosing board evaluation results; rather, the focus is on effective use of text and graphics to evidence a robust process that facilitates constructive feedback so that the board's composition and conduct remain optimal in view of its likely-expanding oversight responsibilities and the company's long-term strategy.

Ron's sound advice to companies:

      What Should You Do?

  • Review your current board evaluation and recruitment process.
  • Review your most recent proxy and other disclosures about these critical processes.
  • Review your peer companies' proxies and their descriptions of their processes.
  • Ask yourself: If our processes are strong, are our disclosures of these processes equally strong? Are we building confidence on the part of investors and others who don't have a direct window into the board, and how board performance evaluations are conducted?

See also Donnelley's 2018 Guide to Effective Proxies (posted on our Annual Meeting page) for numerous additional noteworthy board and director evaluation disclosure examples, and additional information & resources on our Board/Director Evaluations page. This post first appeared in this week's Society Alert!

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