In 2021, in line with our strategic objectives, Morrow Sodali and Nestor Advisors, the London-based corporate governance advisory firm, combined forces to further strengthen our advisory services relating to corporate governance, ESG, sustainability and stakeholder engagement.

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Strategic advice on corporate governance, board issues, compensation, sustainability and shareholder activism

Morrow Sodali provides clients with insights and updates on governance-related matters on an ongoing basis, including the assessment of best practices and emerging trends as they relate to each client’s specific circumstances.

As part of its consulting engagements, the firm provides guidance on the full range of corporate governance matters, anticipating potential challenges to minimize the risk of shareholder activism and alignment of clients' governance profiles with market expectations. Parallel to assessing potential risks from emerging trends, Morrow Sodali provides strategic, practical advice to help clients make informed decisions on such issues as corporate governance, board-related matters, executive compensation and sustainability.

Corporate Governance

Governance assessments conducted by Morrow Sodali identify potential governance gaps and voting issues, but more importantly the firm assesses the risks of these gaps so that directors can make informed decisions and effective strategies can be developed.

Board issues

Director elections, board and committee composition, board member skills, diversity, combined or split Chairman & CEO functions, are among the many board-related issues of concern to shareholders. Morrow Sodali helps clients analyze the relevance and impact of these provisions – from these analyses, risks are measured and strategies are developed and executed.

Compensation

Morrow Sodali has detailed knowledge of how proxy advisors and institutional investors apply their voting policies and the drivers that form their voting recommendations and decisions. Firm experts are therefore uniquely positioned to review and analyze a client company’s remuneration report and assist in the development and explanation of remuneration policies that will be supported by shareholders.

The Morrow Sodali annual remuneration review is an important exercise that delivers valuable insights for companies engaging with shareholders and investors.

Sustainability

The absence of generally accepted standards for measuring and presenting environmental and social risk metrics creates challenges for companies in disclosing performance to investors.

Morrow Sodali helps companies analyze issues and draft reports and disclosures related to environmental and social risks and opportunities.

Ownership profile and analysis of shareholder expectations

Morrow Sodali helps clients understand who owns their stock and how that ownership is likely to respond to the company’s policies. The firm’s background in proxy solicitation, corporate governance and stock surveillance are critical to assessing the degree to which each institution’s voting decisions reflect the influence of outside advisors as well as the role of investment and internal stewardship teams.

Morrow Sodali reviews a company’s ownership profile periodically and provides an analysis of investment and voting disciplines, advisory firm influence, and other pertinent characteristics of a client’s investor base.

Vote projections and updates on shareholder voting policies

Morrow Sodali’s ability to identify clients’ current institutional ownership, combined with its knowledge of institutional voting guidelines, the influence of proxy advisory firms and historical voting patterns, allow the firm to accurately predict the voting outcome on a variety of compensation and governance issues.

After analyzing potential shareholder support for annual meeting agenda items (including shareholder proposals), Morrow Sodali prepares and updates voting projections in advance of companies’ engagement campaigns and proxy solicitation activities so as to serve as a basis for strategic planning and document preparation.

Morrow Sodali assesses changes in ownership and in the evolving voting policies of key identified institutional investors and proxy advisory firms before determining their impact on shareholder support for the shareholder meeting agenda.

Document review and recommendations

Morrow Sodali reviews and comments on disclosure documents being prepared by companies in connection with shareholder outreach, including the preliminary proxy statement, draft sustainability or corporate responsibility reports and other related disclosure documents and solicitation materials.

This review process includes an analysis of the relevant policies and voting decisions of institutional investors and proxy advisory firms, on the basis of which Morrow Sodali can identify areas of possible contention in terms of alignment with company-specific policies and processes.

This document review process is conducted in collaboration with the client company’s Investor Relations, Communications and Legal teams.

Outreach and engagement with key investors and proxy advisory firms

On the basis of a company’s ownership profile, Morrow Sodali will confirm the identity of the primary voting contacts at major institutions and assemble relevant background information about their voting policies and practices in preparation for an outreach and engagement program with institutional investors.

Strategic recommendations are then made as to the most effective approach to engaging specific shareholders and institutions, with the aim of gaining optimal support for key identified voting items.

Presentations to the board and management on relevant trends in governance, sustainability, shareholder rights and activism

Throughout the year, Morrow Sodali consults with its clients on board-related matters and makes presentations to the full board, board committees, and/or executive management on topics such as board composition, board evaluation, succession planning, executive compensation, sustainability, shareholder activism and other relevant issues and trends.

The firm will periodically consult with companies on trends in corporate governance, including its assessment of best practices and trends as they relate specifically to corporates’ policies and circumstances.