How to Draft “Shareholder-Director Communication” Disclosure for the Proxy

As part of your proxy statement filed with the SEC, you will describe whether – and how – shareholders can communicate with a company’s board of directors – or you will post this information on an IR webpage.

We also discuss the other hotline that NYSE and Nasdaq-listed companies need to adopt – procedures so that audit committees can obtain complaints regarding accounting, internal accounting controls or auditing matters from employees. Then for NYSE-listed companies, they need to adopt a third hotline – one for shareholders to submit complaints to the presiding director (or all the independent directors as a group if the presiding director rotates).

At the 6:03 mark, Gunster’s Bob Lamm join us to discuss:

1. In response to Item 407(f), what’s the typical process for shareholders to reach the board look like?
2. Why do some companies include this disclosure in both the proxy and on their IR webpages when it’s not required to do both?
3. How do you deal with employee-shareholders and their desire to reach the board?
4. How do companies handle activating a communications line between people that want to express concerns of an auditing & financial nature to the audit committee? What do those procedures look like?
5. How about the NYSE’s requirement to allow anyone to reach the presiding director or the independent directors?
6. What does a framework that complies with all three of these “reach the directors” requirements look like typically?
7. Do shareholders actually use any of these communication methods?
8. What’s a good way to handle using directors during engagement with institutional investors?

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