Proxy Statement Best Practices for Modern Companies
Proxy statements have evolved from compliance-focused documents to critical tools for shareholder engagement and corporate storytelling. Today's most effective proxy statements go beyond meeting SEC requirements to effectively communicate corporate governance practices, executive compensation philosophies, and ESG initiatives. The GetFeatured team has compiled these best practices to help you transform your proxy statement into a strategic communication asset.
GetFeatured's Proxy Statement Services
GetFeatured provides comprehensive support for developing clear, compelling proxy statements that effectively communicate your governance story. Our team of governance and design experts can help transform your proxy from a compliance document into a powerful communication tool.
Strategic Approach to Proxy Development
Begin by viewing your proxy statement as a strategic communication opportunity rather than a compliance exercise. A well-crafted proxy can:
- Proactively address potential shareholder concerns
- Explain the rationale behind board composition and pay practices
- Highlight corporate governance strengths
- Tell your ESG story in a broader context
- Reinforce your corporate culture and values
Consider forming a cross-functional proxy committee with representatives from legal, investor relations, human resources, and corporate communications to ensure a comprehensive approach.
Design and Readability Enhancements
Modern proxy statements employ design principles that dramatically improve readability and engagement:
Structural Elements
- Table of contents: Include a detailed, hyperlinked table of contents for easy navigation
- Executive summary: Provide a concise overview highlighting key information and changes from the previous year
- Proxy highlights: Create a highlights section summarizing critical information in a visually engaging format
- Sidebar navigation: Consider adding sidebar navigation on digital versions
Visual Elements
- Infographics: Use charts, graphs, and tables to simplify complex information
- Color coding: Implement consistent color coding for different sections
- Typography: Use font hierarchy and adequate white space to improve readability
- Icons and callouts: Highlight key points with visual cues
These design elements not only make your proxy more accessible to shareholders but also demonstrate your commitment to transparency and effective communication. The investor relations experts at GetFeatured can help you implement these design principles effectively.
Board Composition and Governance Disclosure
Effective disclosure of board composition and governance practices helps shareholders understand the strategic thinking behind your leadership structure:
Board Skills Matrix
Include a comprehensive board skills matrix that clearly demonstrates how each director's expertise aligns with your company's strategy and needs. Beyond listing credentials, explain why specific skills are relevant to your business.
Board Diversity
Provide transparent disclosure of board diversity metrics, including gender, race/ethnicity, age, and tenure. Explain your approach to building a diverse board and how diversity contributes to effective oversight.
Board Evaluation Process
Detail your board evaluation methodology, including frequency, scope, and how feedback is incorporated. Highlight any changes made as a result of previous evaluations to demonstrate the effectiveness of your process.
Refreshment and Succession Planning
Explain your board refreshment strategy and how it balances fresh perspectives with institutional knowledge. Discuss your approach to director succession planning and leadership transitions.
GetFeatured's Governance Expertise
GetFeatured provides specialized support for board composition disclosure and governance reporting. Our team can help you effectively communicate your board's strengths and governance practices to shareholders through clear, compelling proxy statements and other investor communications.
Executive Compensation Disclosure
Executive compensation remains one of the most scrutinized areas of proxy statements. Consider these best practices:
Pay Philosophy Narrative
Clearly articulate your compensation philosophy and how it aligns with your business strategy and performance goals. Explain how pay decisions support long-term value creation rather than just providing technical details.
Pay-for-Performance Alignment
Use clear visualizations to demonstrate the relationship between executive pay and company performance. Include realized/realizable pay analyses to show actual outcomes versus reported values.
Performance Metrics Rationale
Explain the strategic rationale behind your performance metrics and targets. Help shareholders understand why specific metrics were selected and how they drive business success.
Peer Group Selection
Provide transparent disclosure of peer group selection criteria and how the peer group influences compensation decisions. Address any significant changes to the peer group from previous years.
ESG Integration
As ESG factors become increasingly important to investors, your proxy should effectively communicate your approach:
Board Oversight of ESG
Explain how your board oversees ESG risks and opportunities, including committee responsibilities and reporting structures. Discuss director expertise in relevant ESG areas.
ESG Goals and Metrics
Outline your key ESG goals and metrics, particularly those tied to executive compensation. Provide context for how these metrics were selected and their alignment with business strategy.
ESG Risk Management
Detail your approach to identifying and managing material ESG risks. Highlight specific actions taken to address high-priority ESG issues relevant to your industry.
Shareholder Engagement
Use your proxy to highlight your commitment to shareholder engagement:
- Document your engagement process and frequency
- Identify key topics discussed during engagement activities
- Explain how shareholder feedback has influenced corporate policies and practices
- Provide contact information for ongoing communication
Digital Optimization
Optimize your proxy for digital distribution and consumption:
- Create an interactive web-based version with enhanced navigation
- Ensure mobile-friendly formatting
- Include video content where appropriate (CEO message, facility tours)
- Incorporate hyperlinks to supporting documentation and policies
Conclusion
A well-crafted proxy statement serves as an opportunity to demonstrate transparency, articulate your governance philosophy, and build shareholder trust. By implementing these best practices, you can transform your proxy from a compliance document into a powerful communication tool that effectively tells your corporate story.
How GetFeatured Can Help
GetFeatured's Pulse platform offers comprehensive tools to help IR professionals develop clear, compelling proxy statements. Our investor relations services are designed to support public companies through all aspects of governance communication.
For expert assistance with developing clear, compelling proxy statements, visit GetFeatured.org or explore our comprehensive investor relations services designed specifically for public companies.
