Business reps. talk shareholdings, communication

Factions within the corporate world are often at odds about communication between directors and shareholders, according to the director of the Center for Corporate Governance. Experts met on Thursday in Gore Recital Hall of the Roselle Center for the Arts for a panel discussion on what companies do when it comes to the controversial subject.

The guests included representatives from Fortune 500 companies Apache and Chesapeake Energy, investment firms responsible for hundreds of billions of dollars, such as Vanguard and T. Rowe Price, and members of the corporate legal community, including Delaware Supreme Court Justice Henry Ridgely. 

Charles Elson, the center’s director, moderated the event as a part of his “Seminar in Corporate Governance” class. He said the talk had a turnout of about 140 people, a mark he said he was proud of.

“That was quite an audience,” Elson said. “You had lawyers from all over the country, investment proxy solicitors and investment firm representatives. You had company corporate governance officers from several of the largest companies in the country. Prudential, Goldman Sachs, Campbell’s Soup—they were all there.”

Most of the experts agreed that director and shareholder interaction is necessary at some level. The difference between many of the participants existed in their idea of how much communication was necessary.

Deborah Gilshan, corporate governance counsel for Railpen Investments, said directors should be willing to talk to shareholders. She said companies have been slow to open up, but that is changing.

“I feel there’s a real shift in sentiment towards an appetite for this sort of direct dialogue between shareholders and investors,” Gilshan said. “We welcome it.”

Donna Anderson, vice president and corporate governance specialist at T. Rowe Price, said sometimes director meetings at her company do more harm than good.

“It’s all over the map,” Anderson said. “Everything from, ‘We really want to hear you, we want to listen, we want to hear what you have to say.’ And then they arrive in our office with a 17- page PowerPoint and plop that down in front of us and talk for the next 90 minutes.”

She said the colleagues have mixed feelings about the meetings, but she does not see a good return on investment in them.

Senior Kehinde Lapite, a business and economics major, said he expected the event to broach a controversial issue, and it did not disappoint. He said the issue has been a topic of discussion in the past, and he expects that companies and shareholders may never reach an agreement.

“It’s all about finding a balance,” Lapite said. “But, clearly there really isn’t a balance. It all depends on individual companies, individual decisions and individual shareholders.”

He said directors and shareholders typically don’t have much to discuss during meetings. Shareholders are often concerned with the immediate future of the company, while directors focus on long term plans for the company.

Senior business and economics major Michael O’Donovan said he was impressed by the lengths the representative from Apache said her directors go to ensure that shareholders are pleased. He said the energy company goes “above and beyond” the usual conduct of corporations.