Reflections from the NACD New England Chapter’s Aspiring Public Company Directors Program Hosted by Mike Cummings, President & Partner
Having recently spent time with aspiring public company directors, I was reminded of how much and how quickly the role has changed. Today’s board seat looks very different from a decade ago. Expectations are broader, scrutiny is constant, and the pace is set less by the boardroom and more by the capital markets.
To help prepare these aspiring directors, I focused my remarks on the importance of shareholder relations: investor relations is no longer a periodic management function. It’s a strategic priority that belongs on a board’s agenda year-round.
From Passive Oversight to Active Stewardship
Public company boards are a relatively small group – with roughly 45,000 directors filling about 55,000 seats in the U.S., and modest annual turnover. But the scope of the role continues to expand.
Today’s directors are expected to thoughtfully engage on strategy, capital allocation, M&A, talent, and performance while concurrently navigating an expanding risk landscape that includes AI, cybersecurity, geopolitics, and more. And they’re doing so in full view of investors and the market.
The shift is clear: board service is no longer about avoiding risk. It’s about preparing for and managing it – and doing so under the eyes of stakeholders.
Investor Relations Belongs in the Boardroom
If the board places investor relations on the back burner until there’s an issue, it is already behind. The gap between effective and ineffective IR can materially impact valuation, yet many boards still treat it as a management function.
Directors should consistently ask:
- Who owns our stock and are they the right investors?
- How are we valued versus peers, and why?
- Where is our equity story vulnerable?
- How do we measure the return on our IR efforts?
- Are we prepared if something goes wrong?
Too often, boards rely heavily on proxy advisors, assume investors think alike, or overlook early signs of dissatisfaction. These are avoidable missteps when shareholder engagement is treated as an ongoing priority.
A Changing Proxy Landscape
The traditional proxy advisory model is also in flux. While firms like ISS and Glass Lewis still influence a meaningful portion of shareholder votes, their role is evolving. Large institutional investors are increasingly building in-house voting and governance capabilities, often supported by more advanced data and analytics.
All this results in less predictability. A favorable proxy advisor recommendation no longer guarantees a favorable outcome. That puts a premium on direct, year-round engagement – something relatively few companies do well.
Activism: A Question of When, Not If
Shareholder activism is no longer occasional – it’s expected. Campaigns are increasing, the range of activists is expanding, and board composition is a primary focus. Importantly, many situations are privately resolved, but with significant impact.
Recent years have seen record levels of activity, driven by market volatility, a more active M&A environment, and structural changes like the universal proxy card. Perhaps more notably, the profile of activists is shifting. It’s no longer just the well-known names – smaller, first-time, and less predictable players are increasingly active.
Preparedness Is Part of the Job
Despite this, many companies remain underprepared. That’s a governance issue, not a tactical one.
Preparation shouldn’t be viewed as defensive or reactive. It’s part of responsible governance. Preparation means understanding vulnerabilities, maintaining alignment between the board and management, monitoring shareholders, and having a clear response plan. The goal isn’t to “beat” an activist – it’s to retain the confidence of the broader shareholder base over the long term.
What Sets Strong Boards Apart
The most effective boards are not defined by reputation or credentials alone. They tend to share a few common traits:
- They engage early and consistently.
- They approach decisions with an ownership mindset.
- They treat shareholder feedback as valuable input, not background noise.
- They work in partnership with management without overstepping.
- And they evolve – refreshing composition and skillsets as a company’s strategy and risk profile change.
For new directors, the takeaway is simple: the role has changed. You’re not there to avoid risk – you’re there to manage it, in real time, alongside all stakeholders. Those who embrace that reality will create value. Those who don’t will eventually be either forced to
Alpha IR Group and Alpha Advisory Group advise boards and management teams on investor relations strategy, shareholder engagement, activism preparedness, and corporate/crisis communications. If any of the themes above resonate, we’re always open to a conversation.
