Several months ago, investor representatives of the Shareholder-Director Exchange (SDX) working group sent a letter to lead directors and corporate secretaries of every Russell 1000 company, urging public company boards to consider adopting and clearly articulating a policy for shareholder-director engagement, whether through adoption of the SDX Protocol or otherwise. The letter stated:

"Engagement between public company directors and their company's shareholders is an idea whose time has come. We believe that U.S. public companies, in consultation with management, should consider formally adopting a policy providing for shareholder-director engagement, whether through adoption or endorsement of the SDX Protocol or otherwise. Several prominent U.S. companies are already following this path of engagement and disclosing their engagement efforts – we believe other public companies should follow their lead."

SDX also announced the addition of four new working group members:

  • Mayree Clark, Managing Partner of Eachwin Capital and Director, Ally Financial Services
  • Gail Deegan, Director, EMC Corp. and iRobot Corp.
  • Rakhi Kumar, Head of Corporate Governance, State Street Global Advisors
  • Anne Sheehan, Director of Corporate Governance, California State Teachers' Retirement System (CalSTRS)

In November, the SDX working group and founders – Cadwalader, Teneo and Tapestry Networks – hosted the inaugural SDX Symposium at the Harvard Club in New York City. The event convened a distinguished group of CEOs, directors and representatives from institutional investors to engage in a candid discussion on the importance of shareholder-director engagement in corporate governance.

The majority of the SDX Working Group, comprised of leading independent directors and representatives from some of the largest and most influential long-term institutional investors, attended the Symposium to lead the discussion along with special guests like Ivan Seidenberg, former Chairman and CEO of Verizon Communications, and William McCracken, former CEO of CA Technologies, Inc. These individuals participated in interactive panels focused on overcoming key challenges to engagement, sharing personal case studies about the future of engagement.

In addition to the panel discussions, the Symposium featured a conversation hosted by CNBC's Chief International Correspondent Michelle Caruso-Cabrera with The Home Depot's Chairman Frank Blake about his perspectives on engagement based on his experiences.

Founded in February 2014 by Cadwalader, Teneo and Tapestry Networks, SDX brings together the collective best thinking of leading independent directors and representatives from some of the largest and most influential long-term institutional investors to explore why, how, and when boards and institutional investors should engage directly with each other. The 10-point SDX Protocol provides guidance to public company boards and shareholders on how to make these engagements more effective and beneficial to both parties.

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