According to the Wall Street Journal, “there are signs that companies are becoming more responsive to investor demands before annual meetings, especially as consumers engage more on environmental and social topics.” As an example of this development, the article points to the recent decision by Mondelez International Inc. to have all of its Oreo cookie wrappers recyclable by 2025. Though the Mondelez decision is the fruits of many years of discussions, the article acknowledges that “[i]t is difficult to measure the effect of closed-door conversations between shareholders and companies.” This is the tension: even with company boards showing greater receptivity to engagement, how does one gauge measurable outcomes of these meetings? This conundrum will probably surface with likely new guidance from the Department of Labor on proxy voting and shareholder engagement this year. One should expect the guidance will call for a greater articulation of the costs spent on these activities, as well as some indicator that any such engagement is in the best interests of the retirement plan investor in light of those costs.
