Shareholder Meetings

1. Capitalizing on the Economic Recovery. From how economic turmoil in Europe will impact U.S. companies to the implications of U.S. tax policy for the company books, long-term shareholders in particular want to understand how management plans to deal with uncertainties in the economy. Questions to Expect: How is the recovery changing the company's strategy? What changes are being made in the company's operation to take advantage of the recovering economy? How is the different pace of economic recovery throughout the world being used to the company's advantage?

2. Handling a Crisis. This boils down to whether companies have crisis management plans in place that will allow them to react nimbly, and in a coordinated way, to a crisis. Bromilow also emphasizes the importance of leveraging social media so that companies can stay on top of a viral story and deliver their own message effectively. Questions to Expect: Are crisis management plans regularly reviewed by the board? Does management revise the crisis plans to reflect lessons learned from the crises of other companies? How does the board get comfortable with the company's overall appetite for risk? Is social media a consideration in any crisis management plan?

3. Political Contributions. Between the impact of the U.S. Supreme Court's 2010 Citizens United decision on corporate political spending and this year's presidential politicking, you don't have to look far (or wide) to know a company's political giving is a hot topic. Questions to Expect: Aside from administrative support of its corporate political action committee (PAC), does the company contribute money to organizations that seek to influence the political process? Does it contribute to trade associations and other tax-exempt organizations that use the money for political purposes? Does the company request a report from trade associations and tax-exempt organizations on the use of the funds it contributes for political purposes?

4. Executive Compensation. Not only is this the second year of say-on-pay votes, but Dodd-Frank calls for rules that would require companies to disclose how executive compensation corresponds with company performance ' which is sure to keep attention trained on this area, according to Bromilow. Questions to Expect: How is executive compensation determined? To what extent was company performance, compared against both its business plan and performance of competitors, considered in setting executive compensation?

5. Technology. Executives need to be able to say both how the company is leveraging the benefits of technology and how it's responding to tech-based threats. When it comes to the use of social media by younger employees, executives should be prepared to speak to how those employees are being trained and informed by company policy ' especially when it comes to safeguarding confidential information. Questions to Expect: What is the company's strategy for cloud computing and plan for the future? Are social media outlets monitored for any grass-roots campaign that could put the company at risk? Does the company have policies in place regarding the use of social media by itself and employees?

6. Whistleblower Reports. The Securities and Exchange Commission's (SEC) whistleblower rules that went into effect last year have been the source of much hand-wringing at companies. With that in mind, setting the tone at the top to encourage internal reporting is crucial. “It's really important within companies to encourage employees to use the company's whistleblower hotline ' even if they do choose to go to the SEC,” says Bromilow. “It's also very important that complaints to the company's hotline are investigated properly by people who are independent of the complaint.” Questions to Expect: Has the SEC contacted the company about whistleblower reports it may have received directly? Have investigations been done by independent competent parties?

7. Board Qualifications. Who's serving on the board matters to shareholders. Let's take, for example, how important technology is as an opportunity and as a risk factor. Then consider, says Bromilow, “the fact that there is, relatively speaking, on most boards very little technology expertise among directors.” Naturally, that's an area where shareholders might have concerns about a disconnect, she says. Questions to Expect: Do the current members of the board have the qualifications and experience to help guide the company into the future? What skills and attributes does the board need in its members? Why aren't long-tenured board members stepping down so new board members may be brought in?

Catherine Dunn writes for Corporate Counsel, an ALM sister publication in which this article also appeared.

The night before a company's annual shareholder meeting probably isn't the best time for executives to start getting ready for potential questions from investors. When shareholders are going to be stepping up to the microphone, a little preparation goes a long way.

Have no fear ' PricewaterhouseCoopers LLP is here for you. Catherine Bromilow, a partner at PwC's Center for Board Governance, and the author of “Audit Committee Effectiveness ' What Works Best” and “Board Effectiveness ' What Works Best.” (www.pwc.com/us/en/corporate-governance/publications/audit-committee-effectiveness.jhtml), recently offered the top seven topics on the minds of investors this year. Below is a list of what company execs should know about what shareholders want to know.

Topics and the Questions

1. Capitalizing on the Economic Recovery. From how economic turmoil in Europe will impact U.S. companies to the implications of U.S. tax policy for the company books, long-term shareholders in particular want to understand how management plans to deal with uncertainties in the economy. Questions to Expect: How is the recovery changing the company's strategy? What changes are being made in the company's operation to take advantage of the recovering economy? How is the different pace of economic recovery throughout the world being used to the company's advantage?

2. Handling a Crisis. This boils down to whether companies have crisis management plans in place that will allow them to react nimbly, and in a coordinated way, to a crisis. Bromilow also emphasizes the importance of leveraging social media so that companies can stay on top of a viral story and deliver their own message effectively. Questions to Expect: Are crisis management plans regularly reviewed by the board? Does management revise the crisis plans to reflect lessons learned from the crises of other companies? How does the board get comfortable with the company's overall appetite for risk? Is social media a consideration in any crisis management plan?

3. Political Contributions. Between the impact of the U.S. Supreme Court's 2010 Citizens United decision on corporate political spending and this year's presidential politicking, you don't have to look far (or wide) to know a company's political giving is a hot topic. Questions to Expect: Aside from administrative support of its corporate political action committee (PAC), does the company contribute money to organizations that seek to influence the political process? Does it contribute to trade associations and other tax-exempt organizations that use the money for political purposes? Does the company request a report from trade associations and tax-exempt organizations on the use of the funds it contributes for political purposes?

4. Executive Compensation. Not only is this the second year of say-on-pay votes, but Dodd-Frank calls for rules that would require companies to disclose how executive compensation corresponds with company performance ' which is sure to keep attention trained on this area, according to Bromilow. Questions to Expect: How is executive compensation determined? To what extent was company performance, compared against both its business plan and performance of competitors, considered in setting executive compensation?

5. Technology. Executives need to be able to say both how the company is leveraging the benefits of technology and how it's responding to tech-based threats. When it comes to the use of social media by younger employees, executives should be prepared to speak to how those employees are being trained and informed by company policy ' especially when it comes to safeguarding confidential information. Questions to Expect: What is the company's strategy for cloud computing and plan for the future? Are social media outlets monitored for any grass-roots campaign that could put the company at risk? Does the company have policies in place regarding the use of social media by itself and employees?

6. Whistleblower Reports. The Securities and Exchange Commission's (SEC) whistleblower rules that went into effect last year have been the source of much hand-wringing at companies. With that in mind, setting the tone at the top to encourage internal reporting is crucial. “It's really important within companies to encourage employees to use the company's whistleblower hotline ' even if they do choose to go to the SEC,” says Bromilow. “It's also very important that complaints to the company's hotline are investigated properly by people who are independent of the complaint.” Questions to Expect: Has the SEC contacted the company about whistleblower reports it may have received directly? Have investigations been done by independent competent parties?

7. Board Qualifications. Who's serving on the board matters to shareholders. Let's take, for example, how important technology is as an opportunity and as a risk factor. Then consider, says Bromilow, “the fact that there is, relatively speaking, on most boards very little technology expertise among directors.” Naturally, that's an area where shareholders might have concerns about a disconnect, she says. Questions to Expect: Do the current members of the board have the qualifications and experience to help guide the company into the future? What skills and attributes does the board need in its members? Why aren't long-tenured board members stepping down so new board members may be brought in?

Catherine Dunn writes for Corporate Counsel, an ALM sister publication in which this article also appeared.