State Street Global Advisors recently released its latest "Issuer Engagement Protocol," a helpful framework for companies with specific guidelines and recommendations on how best to interact with the investor. Key items include:
- State Street prefers in-person meetings for developing relationships with new issuers, but once a relationship is in place, conference calls are preferred to make the best use of time, cost and carbon footprint.
- For active engagement, State Street develops a target list of companies based on factors such as the results of the investor's internal screens, ESG issues, lagging long-term financial performance, or follow-up needed from past discussions.
- Engagement with the lead director and/or key board committee chairs is expected as part of the active engagement process.
- "Reactive" engagement (e.g., during proxy season) should take place in Q2, reserving Q1, Q3 and Q4 for active engagement requests.
- Companies seeking engagement with State Street should provide specific information in requests (see guide for details) to expedite review. State Street lists the considerations for accepting an engagement meeting and also declining (e.g., where it believes it has the relevant information to make a voting decision).