In November, participants gathered in an open round table session to discuss the recently published paper, “Private Shareholder Engagements on Material ESG Issues,” which examined private shareholder engagements and the extent they address financially material ESG issues and contribute to firm performance.

The participants discussed various challenges around engagement efforts, such as:

  • The success rate for engagement is approximately 20%, and successful engagements typically stem from financially material and intense short-term engagements.
  • Given various external factors, it is hard to attribute success directly to engagement efforts. As a result, success stories are hard to find and replicate.
  • Company culture can often be a barrier to successful engagement, especially when some companies are convinced it’s not in their best interest to respond to engagement efforts.
  • Metrics:
    • Are management and board metrics aligned?
    • Does the board have the right background to assess efforts?
    • Instead of assessing specific actions, it is sometimes the trend that is more of an indication of success.
  • Shareholder proposals, since they are public, are perceived to affect an organization’s reputation. This can make collaborations more difficult, even when joint resolutions can often be more effective. 

For future round tables, visit our events calendar here.