Shareholder-Director Exchange (SDX™) Protocol

Broadridge Insights

Shareholder-Director Exchange (SDX™) Protocol

Practical framework for effective, mutually beneficial engagement between public company boards and institutional investors.


The Shareholder-Director Exchange (SDX™) is a working group of leading independent directors and representatives from some of the largest and most influential long-term institutional investors. SDX™ participants came together to discuss shareholder-director engagement and to use their collective experience to develop the SDX™ Protocol.

With the support of Cadwalader, Wickersham & Taft LLP and Teneo Holdings, together with Broadridge Financial Solutions, Tapestry Networks conducted interviews with public company directors, institutional investors, and other thought leaders on their experiences of shareholder-director engagement; some participants joined a working group to create and revise the SDX Protocol.

SDX™ Protocol

The SDX™ Protocol is designed to assist public company boards and institutional investors who wish to consider engagement by providing a practical framework for effective, mutually beneficial engagement. The SDX™ Protocol consists of 10 points, outlined within the document.

“Broadridge commends the working group for its care and insight in creating the Protocol,” said Richard J. Daly, CEO Broadridge. “The working group noted that the Protocol is adaptable by companies and directors for their engagement with all shareholders. In this regard, technology can be essential to eliminating the element of surprise that may occur from one year to the next in director elections and votes on pay plans and other matters.”

Adapting the SDX™ Protocol for engagement with other types of shareholders

The SDX™ Protocol is focused primarily on public company board engagement with institutional investors in real-time, two-way dialogue.  However, this focus is not meant to imply that there is no value to be gained from better engagement with or communication between other shareholders and directors. Indeed, recent data shows that one-third of US company shares, on average, are held outside of institutional accounts and that individual/”retail” shareholders can impact the outcome of shareholder voting. Therefore, most principles of the protocol can be adapted for engagement with other types of shareholders or other types of meetings. 

“Scaling” engagement and communications with broader groups of shareholders may require the use of alternative approaches, including technological resources and tools.  Some current options include virtual annual meetings, electronicforums, and investor “days” that enable better communication or dialogue in between regularly scheduled events.  Some newer technologies can validate the number of shares owned by participants in a forum or survey and provide secure communications in a company-controlled site. Other technologies leverage emergent knowledge. Companies and investors are advised to keep informed of technology changes that may enable them to be more efficient or inclusive.


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SDX and the SDX logo are trademarks of Tapestry Networks, Inc., Cadwalader, Wickersham & Taft LLP, and Teneo Holdings, LLC.

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