Expanding the discussions
Investors and boards are, broadly speaking, paying attention to the same topics. The issue investors have most frequently asked about in the past 12 months is economic growth/recession, mentioned by 64 percent of respondents.
This is followed by inflation (60 percent of respondents), the war in Ukraine (45 percent), gender pay gaps (24 percent), racial equality (19 percent) and political lobbying and spending (14 percent).
Bigger companies have generally faced more questions about economic growth/recession: 82 percent of respondents at mega-caps say investors have asked about this in the last year, compared with 71 percent, 72 percent and 55 percent at large caps, mid-caps and small caps, respectively.
Similarly, almost three in 10 respondents at mega-cap companies (29 percent) say investors have asked about domestic elections, compared with 11 percent of those at small and mid-cap companies and 3 percent of those at large caps. Larger companies have also more frequently faced questions about racial equality and gender pay gaps.
Almost two thirds (64 percent) of respondents in Europe say investors have asked about the war in Ukraine, while 39 percent of those in North America say the same.
Respondents were asked to rate how frequently board members take part in engagement with investors when relevant domestic/global political issues or relevant economic issues are discussed. They used a five-point scale where one is ‘never’ and five is ‘always’.
Overall, almost half (49 percent) of respondents say their board members are never involved in engagement with investors on relevant domestic or global political issues. But sufficient numbers say their directors are involved at least part of the time that the average score is 2.0.
The average score is 1.9 among respondents at small-cap, mid-cap and large-cap companies. But it is 3.2 among respondents at mega-cap companies, 42 percent of whom say board members are either frequently or always engaged with investors on relevant domestic or global political issues.
Overall, there is a higher frequency (average score 2.2) of directors taking part in investor engagement when relevant economic issues are discussed. Again, the frequency with which members of boards at mega-caps are involved is higher (3.3) than among those on boards of small caps (2.2), mid-caps (2.2) or large caps (2.0).
Half of respondents at mega-cap companies say board members are either frequently or always engaged in these discussions.
Primary oversight of company disclosures regarding domestic and/or global political issues most frequently lies with the main board (34 percent), according to respondents. A quarter say the audit committee takes on that role, while 17 percent say management takes those decisions.
More than four in 10 respondents at small-cap companies (45 percent) say their main board has primary oversight, compared with 34 percent, 29 percent and just 13 percent of those at mid-cap, large-cap and mega-cap companies, respectively. More respondents in North America (28 percent) say their audit committee has primary oversight than do those in Europe (16 percent).
