Why Boards Need to Double Down on Shareholder Engagement
Five questions boards should be asking management about shareholder engagement.
For nearly a decade, shareholder engagement followed a fairly predictable rhythm. Institutional investors were transparent with portfolio companies about their governance priorities and stewardship and communicated that information widely. Companies responded with thoughtful engagement.
However, regulatory developments since 2025 have altered that dynamic. The old diplomatic model—built on open dialogue and mutual signaling—has been disrupted. Following changes in US Securities and Exchange Commission interpretations and institutional investor policies, shareholders are now more cautious and more scripted, and in some cases, may be less willing to voluntarily share their insights. Many investors may now wait for a company to initiate engagement.
Yet the need for shareholder engagement has not diminished, particularly with the extraordinary level of geopolitical, economic, and technological disruption in the market. Below are five questions boards should be asking management about shareholder engagement.
1
Boards should ask for specificity around this topic. It isn’t enough for management to say, “We’re meeting with our top shareholders.” Which ones? How often? Every shareholder base includes not only a company’s largest investors but also its noisiest—those who may own less stock but exert outsize influence through proposals, public comments, or visibility in investor forums. Additionally, with respect to noise and impact, boards should ask about stakeholders in addition to shareholders who may exert influence through social media and other outlets. Management should be able to distinguish clearly between these groups and provide the board with a rationale for engagement priorities.
2
How do shareholders perceive the board, not just the company?
Investor relations teams are typically very good at gauging sentiment around company performance, strategy, and earnings. What may be missing is insight into how shareholders view the board itself. Do investors understand the board’s composition, oversight of risk, and role in governing emerging issues, such as artificial intelligence?
Directors should ask: What are shareholders saying about the board as a whole? The board should expect management to gather and relay investor perceptions of how the board oversees key governance issues.
3
What issues are truly top of mind for shareholders right now?
The list of governance topics boards oversee has grown longer and more complex. For example, board governance and education around AI are of increasing interest to investors.
Boards should ask management to identify the two or three issues that currently matter most to the company’s shareholders. In a regulatory environment where investors may be less forthcoming, focus matters. It is important for management to surface current investor priorities, for example, by looking at public stewardship policies, voting behavior, and industry forums. This requires deliberate effort.
4
Every board should have a plan that outlines the circumstances under which an independent director would engage with shareholders. That plan should define who would participate, and if a director is to be involved, what preparation is required and what guardrails are needed. Some investors may expect director engagement only when tensions rise, while others may request it directly. Either way, preparation matters. Training and clarity before the moment arrives may make a difference when it does.
5
How is shareholder intelligence gathered?
If investors are talking less, companies may need to find new ways to gather data. Boards should ask management how they are leveraging public information, industry networks, and investor forums to gather insight.
Are representatives from the company’s investor relations team and the corporate governance team attending stewardship-focused meetings to hear investors discuss priorities publicly? This kind of intelligence gathering isn’t optional; it is a core management responsibility and a board oversight issue.
The bottom line is that shareholder engagement now requires more effort, structure, and creativity than in the past.
This article first appeared in NACD Directorship Magazine.
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