An increasing number of companies now see their proxy statements as another important tool for communicating with shareholders and are taking steps to revitalize them. We talked with Adam Kramer, Corporate Secretary and VP for Public Law at KBR, Inc., about their proxy re-design experience.
KBR was recognized for best proxy at Corporate Secretary’s Corporate Governance Awards in 2017. What were the benefits for KBR and for your team?
“Internally, it cast the spotlight on a team that doesn’t always get a lot of visibility but works really hard and puts in long hours on one of our most important public documents. We also receive feedback from investors who tell us that our proxy is well-written and reflects a mentality of striving to be the best in all that we do.”
Some companies have been hesitant about investing the time to change how they disclose their information. What’s your reaction?
“Documents are evolving as is their readership. People don’t have the time or the energy to sift through a lot of complicated, legalistic texts. They just want to try and understand what our company is doing. The feedback we’ve received from readers is that the charts and tables have made our redesigned report much easier to understand. We believe that with a less clear disclosure, we wouldn’t have had as much voting support from our shareholders.”
What’s the first step to redesigning your disclosure?
“Ha-ha, call Labrador! No, really, the true first step – and the most important – is sitting down and deciding the message you’re trying to convey to your shareholders. You need to be able to answer the question, ‘Why are we doing what we’re doing?’ Once you have that, you can start working with a firm that specializes in getting that message across as clearly as possible. Labrador’s team made it easy with well-defined choices for design and formats. And, importantly, not giving us too many choices, which can sometimes lead to decision paralysis.”
How was your experience using the EOL collaborative platform to create your proxy?
“Our team was very happy with it. EOL gave us the ability to make real-time edits that we could then print out to see how they looked and distribute them to the management team to get feedback. Not only did we save a lot of time, it meant we could also go further and produce the cleanest and best-written proxy possible.”
How about security issues?
“As a government contractor, this is a significant topic for us. We had no concerns with EOL.”
Is there anything you’d do differently?
“Yeah, start even earlier.”
“We were really happy with our re-designed 2017 report and didn’t really envision improving on it. Then, in 2018, I was amazed that we were able to come up with an even better way to tell our story. We believe in moving with the times and improving on what we’ve done before. So now our goal is to do it even better for 2019!”