In recent years, shareholder engagement and proxy statement practices have undergone a significant transformation. This shift is driven by the desire to meet the ever-increasing disclosure requirements in a manner that better informs investors. 

In addition to required disclosure, shareholders are seeking voluntary disclosure about their companies’ sustainability practices and programs. However, amidst this changing landscape, many of these shareholders find it daunting to navigate the complexities of proxy statements and fully maximize this powerful communication channel. 

Compelling proxy statements effectively can empower shareholders to voice their opinions to influence company decisions and shape corporate actions.

The power of elevated proxy statement design

A well-designed proxy statement serves as a powerful tool to convey complex information in a visually appealing and understandable manner. It transforms what is often a dense and intricate document into an engaging and accessible source of information. A well-crafted design communicates governance achievements and builds shareholder engagement, loyalty and trust, while ensuring investors have the facts they need to make informed decisions.

“The design element is extremely significant in not only clearly relaying important information, but also conveying who we are as a company, our culture, and the goals we’re planning to achieve,” says Maria Allen, associate general counsel and corporate secretary at Broadridge Financial Solutions.

“A document that's user-friendly, easy to read, and gets the message across in a transparent manner is what we’re aiming for when we're preparing our proxy statement. Replacing narrative disclosure with graphical information often makes it easier for shareholders to find what they're looking for, so they don't miss key points.”

By presenting information in an organized and visually pleasing format, a thoughtfully formulated proxy statement ensures that shareholders have what they need at their fingertips, empowering them to make informed decisions on matters crucial to the company's future.

Key considerations for this document involve:

• Effectively positioning and differentiating the company against its peers, emphasizing its unique strengths
• Staying aligned with the company's brand standards, incorporating logos, colors, and fonts consistently across all communication channels

Beyond their visual appeal, well-designed proxy statements must also meet rigorous regulatory requirements, ensuring compliance and transparency. By incorporating clear instructions and engaging language, these documents not only meet legal standards but also evoke action, encouraging shareholders to actively participate in the governance process and exercise their voting rights.

Optimizing the purpose of proxy statements

In the spirit of full transparency and accountability, proxy statements now include comprehensive profiles of board members. Photographs often accompany these profiles to humanize the board. “In light of the SEC’s universal proxy rule, companies are reviewing their directors’ biographies and skills disclosures to ensure they clearly capture how each director contributes to the board,” says Allen.

As part of updating board profiles, graphic representations of the skills and diversity matrix provide shareholders with a clear snapshot of the board's composition. This emphasizes the importance of, and support for, diverse perspectives. Proxy statements also incorporate disclosure of the company’s shareholder engagement efforts and actions taken by the company in response to acknowledge the value of shareholders’ input and facilitate further communication and engagement. 

Other enhancements include summaries at the beginning of the proxy to highlight the company's goals, strategies, and performance. In a nod to investors’ increased focus on sustainability topics, proxy statements increasingly highlight sustainability initiatives, goals, and achievements through well-designed charts, tables, and other graphics.

Why design makes a difference in disclosure 

Design helps distill intricate details into digestible visuals, making it easier for shareholders to comprehend complex information. A visually appealing proxy statement that presents critical data clearly and concisely enhances understanding, shapes positive perceptions of the company, and fosters trust and credibility. The proxy statement presents companies with a valuable opportunity to connect with their shareholders while building loyalty and delivering a compelling brand narrative.

Staying abreast of these industry trends and leveraging design to demonstrate the quality of governance, shareholder outreach, and commitment to sustainability are essential for companies navigating the evolving landscape of shareholder engagement.

A skillfully crafted proxy statement can be a strategic tool for effective shareholder engagement. By optimizing the purpose of proxy statements through comprehensive board profiles, shareholder engagement disclosure, and inclusion of sustainability initiatives, companies can foster transparency, trust, and active participation from shareholders. Staying informed about industry trends and leveraging design best practices can position companies for success in the evolving landscape of shareholder engagement. 

With the right partner, such as Broadridge Financial Solutions, companies can navigate proxy season with ease by telling a compelling narrative that resonates with shareholders. Harnessing the power of a well-designed proxy statement provides companies the ability to establish themselves as leaders in governance, shareholder outreach, and sustainability, gaining a competitive edge in the market.