We are pleased to share a recent video interview with BlackRock’s Michelle Edkins and Cornerstone’s John Wilson in which we discuss the value of the “Shareholder Alignment Frontier TM (SAF).” The SAF is a tool inside Cornerstone’s proprietary framework which was specifically developed to help companies make the business case for improved stakeholder relationships through shareholder engagement thus building value for the long term.
As we continue to build the field of Environmental Social and Governance (ESG) analysis, we have broadened our engagement tools for shareholders and companies seeking to enhance corporate governance, sustainability and performance. For shareholders, our recently published “A Voice in the Boardroom” offers practical guidance on corporate engagement through proxy voting. For companies, our report “The Networked Corporation” makes the case for shareholder engagement as a means to anticipate and address emerging issues as they become financial risks and/or opportunities.
The video offers a high level look at important elements of this report including:
- How companies can use the “Issue Lifecycle” to identify relevant issues with “outside voices” interested in ongoing dialogue
- Why public disclosures – regulatory filings, investor days and communications channels – must align objectives in a long-term context to connect all those who have an interest and dependency in a company
- Why the “language of materiality” is both a challenge – and a key – to the engagement model
Edkins on materiality: “It changes a lot from sector to sector as to what of these external factors are most likely to impact the business and what internal drivers are really driving value long term. And the data, I think, isn’t available yet because there isn’t really a reporting framework that makes sense,” says Edkins. “And that’s what I like about this framework – ‘The Shareholder Alignment Frontier’ – as it provides a conceptual way to think through what that materiality might be, and therefore what we need to be anticipating, and what we need to be describing to our investors and to our other stakeholders so that we can all be better informed about where those options are.”
Additionally, we offer Cornerstone’s recent Letter to the SEC on the importance of consistent disclosure of sustainability issues to investors.
Erika Karp is Founder and Chief Executive Officer of Cornerstone Capital Group.