2012 Corporate Governance Investor Survey
Shareholder Voice Growing Louder in the Boardroom
Institutional investors – long viewed as passively following the recommendations of corporate governance ratings firms such as Institutional Shareholder Services – are forging their own way in 2012. FTI Consulting’s second annual Corporate Governance Survey shows that investors are demanding more influence over the corporate affairs of their portfolio holdings and using more of the tools at their disposal to ensure their views are heard. Executive compensation remains 2012′s hot topic, and managements and boards that failed to take seriously any meaningful opposition to compensation last year are the most vulnerable.
It is clear that the proxy vote has become a referendum on a company’s performance, corporate governance, and its ongoing engagement with shareholders. A proxy vote is no longer a discrete event: how a company responds to shareholder concerns expressed in one proxy vote will have repercussions on future proxy votes. Moreover, there is strong support for a variety of measures that allow shareholders to have greater say over governance issues. Investors clearly want to hold managements and boards accountable, and plan to use their vote to express concerns about performance or stewardship.
During January 2012, FTI Consulting surveyed 143 institutional portfolio managers and analysts in the U.S. and Canada about their attitudes towards topical proxy issues. Survey results were anonymous.