EVER since the folks at Risk Metrics asked me several weeks ago to write something for directors about communicating with shareholders, I’ve been struggling to put down my thoughts in some sort of coherent form.
The problem, you see, is that I don’t think there’s anything directors can do. Communication is not enough. PR and lobbying won’t cut it. We’re beyond a loss of trust. We’re into an entirely new realm now — a near total loss of legitimacy.
Except perhaps in China, Brazil and the companies people actually work for, the surveys are showing that the public has lost confidence in boards, directors, executives, and even in the concept of the corporation itself. They’re all part of “Wall Street” now.
And that means they have zero legitimacy in they eyes of the public. Nothing corporate boards say or do is going to be heard. Nothing. It’s all just waffle to the public. In one ear and out the other.
That leaves boards and executives with only one option. Re-establish legitimacy by being the legitimate elected representatives of the shareholders. Get out the vote at this year’s annual meeting like never before. Spare no expense or effort. Don’t do a notice-and-access e-Proxy because that will make the problem worse.
Think about the Obama campaign when you think about your annual meeting. And remember, the audience is not Calpers or Fidelity. They’re institutions, too, and the public is “short” institutions.
Every cent spent on getting Main Street to participate in the annual meeting this year will be returned many times over. It will be much more difficult for people to ignore corporations when they feel that they are part of them.
SEC Commissioner Elisse Walter this week suggested as much in her speech. Read it. It’s well worth the 10 minutes.
My thoughts aren’t complete and I’m frustrated that I haven’t been able to articulate them in a more elaborate post. But when I read “The Responsiveness Imperative” by Umair Haque on the Havard Business website, I couldn’t help but post something.
Read Haque’s post. I think he’s tapped into the public’s mood.