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June 4, 2010 1:19 PM Age: 7 yrs

ICO or IRO? It’s Time to Decide

Category: AC GAI Billboard, AC RSS Feeds, AC RSS, AC Whats New, CG Commentary & Opinion, Eleanor Bloxham, IR Commentary
Source:  Eleanor Bloxham, Featured commentator, Accountability Central

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As I wrote in a recent blog post on, it is difficult to have relations without a relationship. 

So why do so many companies act as if the investor is the enemy?  If they don’t intend to foster positive relations, why not just rename the IRO (Investor Relations Officer) the ICO (Investor Conflict Officer)?

I think most companies set out to have good relations but, somewhere along the way, they lose sight of the objective. They are busy, frustrated, preoccupied. Contentious lawyers get involved. Or a conflict is already blazing.

As a result, they end up sending correspondence to shareholders as Massey did recently (issued to the public in press releases) using phrases such as:

  • As I am sure you are aware…
  • You claim…
  • This is patently false.
  • I fundamentally disagree with the substance of your argument and do not subscribe to the formulaic approach you have outlined.
  • You go on to mention a list of generic corporate governance issues without acknowledging…

Or making public statements saying, “those who disagree have narrow interests…”

Who knows? Doing this may produce some relief and even pleasure in a high-pressured environment, but it’s likely to be short lived – and is likely to hurt in the court room where, too often, these stories end up.

As a result of losing sight of the objective, companies also don’t take all necessary care in the wording of their proxies.  


They treat the shareholder proposals as just so much bother.

Or they use the shareholder proposal as an opportunity to take some side-swipes at the shareholder who came up with such an idea. See “Say on Pay defense 2” outlined here.

Or they take every precaution, related to shareholders’ presence at the meeting, clearly indicating that such presence could, in every likelihood, be problematic.

For example, Fifth Third provides an annex 3 to its proxy, laying out the regulations for the meeting, which states: “If you have a matter of individual concern which is not an appropriate subject for general discussion, please defer discussion until after the Meeting at which time officers of the Company will be available. The Chairman will stop discussions which are repetitive, derogatory, over the time limit, irrelevant to the business of the Company or the items on the Agenda for the Meeting, related to pending or threatened litigation, regulatory proceedings or similar actions or otherwise inappropriate. Derogatory references to personalities, comments that are in bad taste, the airing of personal grievances, the injection of irrelevant controversy, personal attacks, refusal to follow these Regulations or interference with any speaker will not be permitted and will be a basis for silencing or removal from the Meeting.”

Or worse yet, as in the case of Apache, they don’t even allow the shareholders to speak. See this entry on

We all recognize that not all proxy meetings are Thanksgiving Day celebrations. (And sometimes there is a reason for that.)

That said, IROs, if so they be, and not ICOs, need to find a way to communicate that enhances relations, not just manages conflict. They need to think of issuing invitations rather than orders.

It’s easy to be caught up in the pressures of the moment. And we all do that.

But in the end, if it’s a relationship you want, that’s the objective to keep in mind.

Author: Eleanor Bloxham, a governance and valuation authority, is CEO of The Value Alliance and Corporate Governance Alliance (, a board education and advisory firm,  and the author of the books Economic Value Management and Value-led Organizations. You can register for a complimentary subscription to her Digest publication at

 Copyright 2010. The Value Alliance Company. All Rights Reserved.




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