Companies Split on Providing Proxy Materials Electronically, Study Finds

About half of U.S. companies who responded to a recent survey by the National Investor Relations Institute (NIRI) are choosing to provide proxy materials electronically to shareholders this year, while the remaining number is awaiting to see the result before making a decision on whether to use the method.

According to NIRI’s study, about 56 percent of the 482 of 3,137 corporate members that responded are planning to adopt the electronic method via rules that were adopted last July by the Securities and Exchange Commission, which require companies to provide shareholders with materials in electronic or in hard-copy form. The remaining 44 percent have take a “wait-and-see” approach, hoping to await lessons learned from the early adopters, the study finds.

The Commission’s rules, though, allow issuers of proxy materials to have the option of providing them via a “notice-only option,” a “full-set delivery” option, or a combination of the two.

The decision by these companies was determined by the high expectation of cost savings, the study shows, but whether the promise of significant savings becomes a reality has yet to be seen. Seventy-nine percent of those companies adopting the new rules report that they expect to save money in the process, which was the key driver for their decision.

What’s more, the greatest proportion of respondents indicated that they expect to spend less than half of what they did in 2007 on hard-copy distribution; 91 percent intend to print fewer meeting materials as a consequence of notice and access.