Campaigns in the corporate governance category address the system of rules, policies, and practices that dictate how a company’s board of directors manage operations of a company, including principles of transparency, accountability, and security. Matters that pertain to corporate governance can include board composition, executive compensation, political contribution, and lobbying. Poor corporate governance, at best, leads to a company failing to achieve its goals. At worst, it can lead to a company’s collapse and significant financial loss for its shareholders. We want to ensure companies are run fairly and in a responsible way both for their workforce and society at large.
It’s important for shareholders to stay informed about corporate governance as changes in governance can have an enormous effect on not only the business, but also the businesses wider community and even global impact.
How engagement and activist investing can influence corporate governance
Publicly held companies are required by the Securities and Exchange Commission (SEC) to distribute proxy statements ahead of their annual general meeting (AGM), which should contain information about any proposed nominations or changes to the board of directors as well as executive pay rises. However, how this is communicated to you as an investor is not standardised across all investment platforms which can make it tricky for investors to keep up with all the current information.
If you invest through Tulipshare, you’ll not only be kept informed of the communications taking place between us and the investor relations teams of the companies we’re campaigning against, but you’ll be informed by us ahead of a company’s proxy season. We want shareholders to be active in flexing their rights, so we’ll do all we can to make sure you have the information you need when you need it.
Shareholders have an opportunity to vote on these matters at the AGM or by proxy. Additionally, some shareholders can also request disclosures on a company’s lobbying activities, to shed light on political activity and contributions.
What can we do to push businesses to have better governance?
Shareholders have good reason to be concerned about a CEO’s pay check, because excessive pay contributes to inequality not just through pay structures within the company, but in the economy as a whole. It’s important to remember that an increase in a CEO’s paycheck does not necessarily mean their value to the company has increased. So perhaps it’s no surprise that we’re starting to see an increase in investors having a ‘say-on-pay.’
Electing a good board of directors is also highly important and drastic changes to the board can equal drastic changes to corporate governance. This was demonstrated recently when Exxonmobil was forced by shareholders to fire three of its board directors and replace them with three new directors whose aim was to help the company reduce its carbon footprint.
Besides staying informed and encouraging shareholders to vote in the proxy season, Tulipshare’s focus is to fight for the things our users are passionate and leverage shareholder rights wherever possible. If you would like to suggest a campaign which pertains to corporate governance, we’d love to hear from you