Disclosure Effectiveness for Small & Mid-Caps - June 2019 - Proxy Statement Improvement Guide

Q: Why is disclosure effectiveness more challenging for small and mid-caps in 2019?

Annual meetings are harder due to regulatory developments and shifting investor dynamics, and there is no guarantee investors will meet or spend significant time understanding a proxy story.

Q: What proxy topics does the guidance emphasize beyond standard disclosures?

It highlights say-on-pay and related governance mechanics for directors, the lack of broker discretionary voting for directors, majority voting, passives becoming more active on ESG issues, and shifting ISS/GL expectations.

Q: What practical writing techniques are recommended to improve investor engagement?

Use fewer words, make the proxy skimmable with bold, active headings, ensure information flow is logical by placing the most important information up front, group related items together, and provide a layered proxy summary.

Aug 27, 2026

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Guidance on improving proxy statement disclosure effectiveness for small and mid-cap companies ahead of annual meetings, addressing regulatory and investor-dynamics shifts that make engagement harder and that do not guarantee investor attention. Covers key proxy voting themes such as say-on-pay, board voting mechanics, and ESG-related scrutiny, and highlights practical drafting tactics including shorter wording, skimmable structure, clear information flow, a layered proxy summary, and writing for multiple audiences. Includes recommended summary sections for investors and governance improvements.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages5

Reading Time13 min

AccessFree to download

Why this matters

Say on pay and governance voting themes

Use fewer words - make it skimmable

Information flow and layered summary

Audience-focused disclosure

Retail, ISS/GL, employees/media, SEC, institutional shareholders

Recommended summary sections

Disclaimer and AGM logistics

Performance, board, governance, compensation

Other critical story elements

Disclosure Effectiveness for Small & Mid-Caps Aaron Briggs | June 28, 2019 Why this matters Annual meetings harder due to regulatory developments & shifting investor dynamics No guarantee investors will meet with you No guarantee investors will spend a lot of time trying to understand your proxy story Say on pay No broker discretionary voting for directors Majority voting for directors Passives increasingly“active” on ESG issues Shifting ISS/GL goalposts ~70% of large asset managers engage with <25% of their portfolio co’s each year –Stanford Rock Center “Deconstructing Proxies” State Street Example as of Q4 ‘16 Based on 10/24/16 WSJ article: “Meet the New Power Brokers” 9 governance analysts 9k portfolio companies As a small/mid-cap the odds may be against you 2 30 approx. \# of hours spent on each company annually approx. \# of minutes spent on each co. during proxy season 1 Short Are you using more words than you need? 􀂾 More words = more time = investors more likely to stop reading 􀂾 Take fresh look at each sentence & be ruthless … Berkshire ‘18 proxy = 24 pgs 2 Skimmable Can the reader get the “gist”from a 5-minute scan of your proxy? 􀂾 Bold, active headings break up text & preview section/paragraph 􀂾 E.g.,“Why the board believes its leadership structure is appropriate” 3 Does the flow of information make sense? Logical 􀂾 Highlight most important info up front (hint: not 5 pages of meeting Q&A) 􀂾 Group related info together (e.g., AC report + auditor fees + auditor proposal) 4 Layered Six words: do you have a proxy summary? 􀂾 If answer is no, stop reading this & draft one immediately (see next page) 􀂾 Single biggest boost you can give your proxy … doesn’t have to be fancy 5 Audiencefocused Who are you writing for? Likely lots of folks… Retail (can a 10-yr old understand it?), ISS/GL (does it check all the boxes?), employees/media (does it provide appropriate context?), SEC (is it balanced?), Institutional shareholders (figure out what they want to know & provide it) None of these improvements require a lot of resources… 1 Disclaimer Essentially: “you should read the rest of the proxy too before voting” 2 AGM logistics Date + time + location + record date + how to vote + voting items (including board recommendations & cross-references) 3 Performance Busupdinaetess highlights + recent performance across key metrics + strategy 4 Board Nominee info (e.g., name, age, tenure, job, committees) + overall composition (e.g., experienced, independent, tenure mix, diverse) 5 Governance Investor-friendly governance practices + recent enhancements 6 Compensation Key decisions + program changes + “summary” summary comp table 7 Other What’s not covered above that’s critical to your story (e.g., auditor info, investor outreach, succession planning, turnaround)? If investors read only the summary, what should be in it? Aaron Briggs Of Counsel at Gibson, Dunn & Crutcher 555 Mission Street, Suite 3000, San Francisco, CA 94105 Tel: +1 415.393.8297 | Cell: +1 213.393.9314 [abriggs@gibsondunn.com](abriggs@gibsondunn.com) Questions?

FAQs

Why is disclosure effectiveness more challenging for small and mid-caps in 2019?

Annual meetings are harder due to regulatory developments and shifting investor dynamics, and there is no guarantee investors will meet or spend significant time understanding a proxy story.

What proxy topics does the guidance emphasize beyond standard disclosures?

It highlights say-on-pay and related governance mechanics for directors, the lack of broker discretionary voting for directors, majority voting, passives becoming more active on ESG issues, and shifting ISS/GL expectations.

What practical writing techniques are recommended to improve investor engagement?

Use fewer words, make the proxy skimmable with bold, active headings, ensure information flow is logical by placing the most important information up front, group related items together, and provide a layered proxy summary.

Aug 27, 2026

Upload by Paura