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Best Practices for a More Powerful Proxy Statement

Easy-to-implement design changes can create a more effective shareholder communication.

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In recent years, the proxy has evolved from a regulatory disclosure document to a vitally important shareholder communication. At the same time, proxies have become longer and more densely packed with information, in response to both SEC requirements and shareholder demand for transparency. It’s no wonder so many companies are taking a fresh look at their proxy statements: They’re going above and beyond requirements to provide more detailed information about governance decisions.

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The need for clear and concise communication has never been greater. The proxy statement may be one of the few shareholder communications that actually gets read and analyzed. Yet today’s time-challenged proxy voters and shareholders have very little time to read and digest all the information.

It’s no longer enough to design with only SEC compliance in mind. In order to advance corporate goals, proxy statements must make detailed information more accessible and easy to understand. For many companies, that means re-imagining the entire look and feel of their proxy statements to create a more user-friendly document. This transformation can be an incremental change, or a complete redesign. No matter which approach you take, you should take advantage of best practices to help your company get the most value from your proxy statement. Here are some suggestions for you to consider.

1. MAKE YOUR STORY MORE ENGAGING

Increasingly, proxy statements are borrowing proven design techniques from annual reports and other shareholder communications. Dull, all-type documents are giving way to a simpler, more visually appealing approach that incorporates company brand values, color and graphics that help readers understand complex issues quickly.

No one wants to read a lot of legalese, or search for the information they need. Use plain English, and structure your proxy to encourage greater engagement. Provide a detailed table of contents, and use section headers to help readers navigate long documents. Lead off with a chairman’s letter, or a communication from the entire board. Use bold fonts, color, shading and graphics to draw attention to important messaging.

2. SUMMARIZE KEY POINTS

There’s a growing trend to include a brief summary (usually several pages) that encapsulates all of the highlights right up front. A summary is a great way to balance the need to provide more in-depth data with investor’s demand for brevity and clarity. It’s also an opportunity to outline your company’s goals and strategy. Don’t hesitate to include visual elements to enhance understanding.

3. AIM FOR A MODERN “LOOK AND FEEL”

Make your design easy on the eyes. For easy reading, keep paragraphs short, and columns no more than 64 characters wide. Give each page enough white space to allow plenty of “breathing room” for your content.

Select appropriate fonts. Whether you choose a serif or sans serif style, standard fonts such as Arial or Palatino will render cleanly both in print and on the web. As a general rule, two font families (including various weights and styles, such as bold and italic fonts) are sufficient.

Consider font size carefully, and limit the small print to footnotes. Allow at least two extra points of space between lines of text to enhance readability. Make page layouts more varied and interesting with bullets, tables and checklists, and use color to draw the reader’s eye and emphasize key points that might otherwise be missed.

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4. VISUALIZE INFORMATION WITH CHARTS AND GRAPHICS

A well-designed chart highlights key data and makes your point instantly clear. Keep charts and graphs simple and straightforward, with legends that are easy to read. Don’t go overboard on creativity or combine subjects. Clarity, logical organization and consistency count. Use graphics in your proxy statement to:

  • Explain executive compensation
    “Say on Pay” continues to be a hot button issue. Use graphs to show how your compensation packages compare with those of peer companies and competitors
  • Reveal board composition
    A board matrix delivers key data about your directors in a single glance. Visualize board diversity, tenure, and the range of skills and experience that candidates bring to the table
  • Clarify corporate policies
    Create a checklist that shows which governance practices your company follows, and which it does not
Powerful proxy statement chart

5. PERSONALIZE YOUR BOARD

When shareholders can associate a face with a name, they are more likely to feel a connection to your board and your company. So add photos to enhance director profiles. Use bullet points make it easy to scan board member qualifications, career highlights, committee memberships, and other board memberships.

6. PROMOTE YOUR BRAND

Make a strong first impression with a branded cover design. Use your colors, tagline and other brand elements throughout the document to remind shareholders of your brand values, and help institutional proxy voters understand what your company does.

LET BROADRIDGE HELP

No matter what design approach you choose, you’ll want to have an intuitive, cost-efficient solution to help make your vision a reality. That’s where Broadridge can help. Our Enhanced Proxy Design Service streamlines the proxy design process from start to finish. We offer four comprehensive packages that include typesetting and design services, unlimited author’s alterations, HTML conversion and fast turnaround—so you can save time and effort while keeping your budget under control.

You’ll also benefit from our unsurpassed knowledge of SEC requirements, shareholder communications and financial technology. Tap into the industry’s trusted leader in proxy design:

  • More efficient content management
    A single-source XML document simplifies authoring and version control, and can output for print or the web
  • Cost reduction
    We can help reduce the number of pages in your proxy to minimize printing and mailing expense
  • Enhanced packaging
    Get your proxy noticed in the mailbox and increase open rates. Clear back polywrap packaging shows your proxy cover before the envelope is opened

TALK TO THE PROXY EXPERTS AT BROADRIDGE

Let the industry’s only true single-source solution for all your document management, SEC compliance and shareholder communications needs show you how easy and cost-effective it can be to power up your proxy statement.

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