Stakeholder communications

Clear lines of communication?

Stakeholder communication is a subject of debate among board members. While many stakeholders are pushing for increased transparency and more communication with the board, directors have differing opinions about what—and whether—to communicate.

Communicating with stakeholders

Directors do communicate substantive issues with stakeholders: About 70% of directors have communicated with employees over the last 12 months, and 61% have done so with institutional shareholders. But less than half (46% and 44%) of directors have communicated with the media and retail shareholders in the last year.

Not all directors agree that there should be communication:

  • 24% believe the board should not communicate with employees
  • 33% say they shouldn’t communicate with institutional investors, and 50% say the same about retail shareholders
  • 41% to 51% don’t think the board should communicate with proxy advisory firms, regulators, analysts, and the media

Talking topics with shareholders

This divide is also evident when it comes to certain topics. Between 25% and 31% of directors say it’s “very appropriate” to communicate directly with shareholders about governance, executive compensation, and director nominations issues. But about the same—between 26% and 38%—say the opposite.

This divergence is compounded by the lack of policies addressing director communication at many companies. Nearly half of directors say their boards have no policy addressing communication protocols with stakeholders or one that’s not useful. And about a quarter of directors who don’t have a policy think they should have one.

Communication with stakeholders: A split decision
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