One of the reasons why the proxy has become so much more important in the last decade is that shareholders have taken the elections of directors more seriously and are more apt to vote against a director than they used to be.
Even when every director on a particular board received more than 95% support from shareholders, they were still competitive among themselves if they were at the low end of the scale compared to their peers. “Why did I only receive 97% support when everyone else received 98%?” Most directors are quite sensitive to how much support they receive.
Throw in the universal proxy rules and things get very interesting. Proxy contest-like events really jar the board and getting support for directors has never been more important.
That sets the stage for a key observation: companies have made enormous strides in telling a director’s story. Many companies go beyond the regulatory requirements to attempt to be persuasive and bring in the vote.
Director bios are not the staid disclosures they used to be and many companies make the effort to explain why each particular director is qualified to serve on the board for that particular company. “This director was recruited because of their unique cybersecurity background.”
There is also broader board disclosure that adds to a director’s story. Disclosure about how the board is providing oversight and educating themselves on what can feel like a day-to-day basis. The curtain has been pulled back somewhat and from the proxy, you can get a good sense of how the board operates for many companies.
For example, see the 2023 General Motors proxy (page 14):
Also check out the 2023 Portillo proxy statement (page 15) as each director’s bio includes a blurb on what that director’s favorite cultural value of the company is:
