ICD Director-Shareholder Engagement Guidance Released

On March 8, 2016, the Institute of Corporate Directors (ICD) released its guidance on director-shareholder engagement in response to demands from investors, including activist shareholders, for increased and better dialogue with their corporate boards. While traditionally management has been primarily responsible for interacting with shareholders, ICD now believes that directors can play a meaningful role in shareholder engagement and may serve to mitigate tensions related to board and corporate governance. In the words of its President and CEO, Stan Magidson, the approach of the ICD is to see this as an opportunity to “build bridges, enhance mutual understanding and provide valuable insights.” The ICD guidance is framed around six core recommendations: knowing your investors, recognizing the benefits of engagement, adopting a strategic and tailored process, framing your discussion appropriately, addressing the real decision-makers and making the most of what comes out