Shareholder engagement

Shareholder communication policy

Having a shareholder communication policy in place helps to maintain an effective, two-way dialogue with shareholders, to whom the directors of an issuer are accountable. Issuers are required to review its implementation and effectiveness on an annual basis. The conclusion from the annual review should be disclosed, together with any actions taken (or to be taken) following such a review.
Effective communication with shareholders can bring constructive feedback to the board’s decision-making process. The board’s proactiveness, as well as how such feedback is reflected in the board’s discussions or decision-making, should form part of the periodic board performance review assessments.

Communication channels

There are different ways in which issuers can communicate with shareholders. Issuers should set out the communication channels available to shareholders to express their views on matters affecting the issuer, as well as the steps taken by the issuer to solicit and gauge the views of the shareholders and other key stakeholders.
Ways in which issuers may enhance shareholder communication include, but are not limited to:
- Appointing one of the INEDs to be the Lead INED (see below).
- Appointing a suitably qualified senior investor relations officer or establishing a designated investor relations function with access to the board.
- Formalising periodic meetings with shareholders. Such meetings may, depending on the issuer’s circumstances, include investor and analyst briefings, shareholder roundtables or webinars (which may enable issuers to engage with particular groups of investors in a smaller setting).
- Enhancing the disclosure in respect of the contribution or work done during the year by INEDs and the Lead INED (if there is one) in the annual report, including quantitative metrics of their engagement with independent shareholders.
To strengthen accountability and transparency, issuers are required to provide details of the board’s engagement with shareholders, including the nature and number / frequency of such engagements, the group(s) of shareholders and issuer representatives involved, and the issuer’s approach to following up on the outcomes of these engagements.
Issuers are encouraged to disclose the major areas of interest for investors and the issuer’s strategy / key areas of focus in relation to the management of key stakeholder relationships during the reporting period. Such disclosure may be included in the issuer’s annual report, website and announcements issued pursuant to the Listing Rules. Examples of areas or topics that shareholders may be particularly interested in include the following:
- INEDs’ contribution or work done during the year (including that of the Lead INED).
- INEDs’ engagement with shareholders, particularly independent and minority shareholders (e.g. number of meetings held during the year and the focus of such meetings).
- Key appointments to the issuer’s board during the year and impact.
- Board performance review (e.g. findings from review conducted during the reporting year and related actions taken by the board during the gap year between reviews, such as the assessment of priority areas / desired performance objectives for the next review).
- Key transactions, including notifiable and connected transactions during the year.
- Dividend policy and related decisions during the year.
- Capital management strategy, including measures planned or taken to improve the issuer’s valuation.
- Business outlook, substantiated by short- and long-term plans and strategies devised and / or implemented during the year.

Lead INED

Dividend policy and related disclosure