Scott Syphax, CEO of Syphax Strategic Solutions in Sacramento, California, shared his predictions for the upcoming proxy season, which is the time of year when shareholders submit proposals for review and vote. He believes that this year’s proxy season may be different from previous years due to the divisive social, political, and economic environment we are currently facing. Boards of directors will likely have to navigate a range of issues, including climate change, political spending and lobbying, human rights, diversity, equity, and inclusion, health and safety, and data privacy and cybersecurity.
Syphax expects climate change to be a significant focus in boardrooms this year, particularly in relation to greenhouse gas emissions. He notes that managing proposals on this topic will require a nuanced approach, balancing shareholder expectations with long-term corporate sustainability goals. Additionally, he predicts an increase in shareholder proposals related to political spending and lobbying as people become more aware of the impact of corporate involvement in these activities.
Another area of concern for shareholders is human rights, specifically related to supply chain transparency and human rights risk assessments. Proposals addressing these issues are expected to become more relevant in the future as companies are called upon to take responsibility for the exploitation of human rights. Similarly, the focus on diversity, equity, and inclusion is expected to continue, with more proposals likely to address workforce diversity, pay equity, and DEI metrics and targets.
Health and safety, both in the supply chain and close to home, are also expected to be key areas of focus during this proxy season. Shareholders are likely to bring forward proposals related to workplace safety, occupational health, and product safety. Additionally, with the increasing threat of cyberattacks, shareholders might demand more information on how companies manage data privacy and cybersecurity risks.
To navigate this unique proxy season, Syphax advises boards to embrace transparency and open communication with stakeholders, actively solicit feedback, conduct regular risk assessments, and build a strong and resilient organizational culture. By investing in employee training, diverse leadership development, cybersecurity measures, and innovative technologies, boards can position their companies for long-term growth, success, and shareholder value creation.
