Time with Investors Grows for Corporate Secretaries

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By Che Odom

March 29 — Corporate secretaries increasingly spend a large portion of their time interacting with institutional investors over governance issues, even as their budgets remain relatively flat.

A survey this year of corporate secretaries from 276 companies, obtained by Bloomberg BNA from the Society of Corporate Secretaries & Governance Professionals March 29, found that 63 percent of respondents are at least somewhat involved in investor communications.

The survey also found that half of corporate secretaries at large-cap companies directly initiate contact with investors, while 30 percent of those at mid- and small-cap companies do so.

“Year over year, the demands of investor communications increase, yet corporate secretaries are not getting more resources,” Darla Stuckey, the society's president and chief executive officer, told Bloomberg BNA March 29. “That is one frustration with the growth in engagement with institutional investors, but a focus on governance best practices is positive.”

The corporate secretary position typically is held by a relatively senior member of management, often the general counsel. While the role includes responsibility for record-keeping tasks, the position also involves serving as liaison among corporate stakeholders, such as directors, officers and stockholders.

“Communicating investor views to their company’s board and management was particularly important this year as companies considered proxy access and other proposals,” Stuckey said.

Fielding Questions

Since 2014, more than 200 public companies have adopted provisions that allow eligible shareholders to nominate directors to their boards, which could create more investor-related work for secretaries, Stuckey said.

Forty percent of survey respondents said the number of investor questions about proxy access and other governance issues has increased over the last few years.

The surge in shareholder activity on governance issues can be attributed largely to the enactment of the 2002 Sarbanes-Oxley Act, the 2010 Dodd-Frank Act and Dodd-Frank's say-on-pay provisions that require companies to hold shareholder votes at least once every three years on executive compensation packages .

A Positive Change

The focus on governance best practices is a positive change, but the increase in interaction can be taxing on corporations and investors, Stuckey said .

“You have investors who are turning away companies seeking engagement on issues,” she said. “Both sides want to establish relationships, but that can take a lot of time.”

To contact the reporter on this story: Che Odom in Washington at codom@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com

For More Information

The survey will be released this week by Rivel's Corporate Governance Intelligence Council, at www.rivel.com.