Regions Financial Corporation in Birmingham, Alabama, has in recent times adopted best practices across a range of governance areas. In doing so, it owes much to Hope Mehlman, executive vice president, chief governance officer, assistant general counsel and assistant corporate secretary, and her team. ‘This is not just a job – it’s a passion for us,’ Mehlman says.
Just one example is a ramped-up focus on ESG over the past year. Mehlman has led an expansion of the company’s corporate sustainability report into a full-scale ESG report that uses Global Reporting Initiative guidelines and includes information on climate change, human capital management, sales practices, privacy & data security and corporate culture.
She also created an environmental sustainability policy statement designed to show the company’s commitment to operating in a sustainable manner and make it easier to introduce pro-sustainability practices such as recycling. Not content with just having nice policies, she also set up an environmental working group that meets quarterly to discuss ways to tackle issues including the company’s use of Styrofoam.
The team approached the board about adopting a Rooney Rule to include diverse candidates in director searches. Mehlman says the board was already doing so and felt that formally adopting the policy would be a good signal to investors. ‘We feel the board should reflect our employees, communities and customers,’ she says. ‘We want to be proactive and ahead of the game from a governance perspective.’
She advocated for the compensation committee to include in its charter responsibilities for overseeing human capital and talent management, diversity and inclusion practices and management succession. At board level, she also helped in the transition to an independent board chair this year.
Regions Financial was also short-listed for this year’s shareholder engagement award, and with good reason: Mehlman’s team takes a year-round approach to keeping in touch with investors and puts in a lot of miles to meet with them. She points to the importance of knowing and understanding investors. She wants to give unfiltered feedback to the board – and to do that she gets to know investors personally.
An important part of Mehlman’s engagement work involves getting to industry conferences to meet face to face with shareholders. This year the team’s efforts have included attending Harvard Law School’s Corporate Governance Roundtable, Stanford Law School’s Institutional Investor Forum, the investors forum at the Society for Corporate Governance’s 2019 national conference and the Council of Institutional Investors’ (CII) 2019 spring conference.
Mehlman is one of only two corporate members of the CII board, where she sits on the policy committee. And she is vice president of the Society for Corporate Governance’s southeastern chapter. ‘People get to know you, and a lot of this is about trust,’ she says.
Another important aspect of the engagement program has been getting more director involvement. For example, Mehlman arranged for 10 investors to meet with the chair and three committee chairs from the Regions board. Her team has also invited investors to come to board meetings, meet with committees and share their views on corporate governance – which the board appreciated, she says.
Elsewhere, she ensures the company’s proxy statements discuss important issues as they arise. In 2018 that included disclosure about Region’s actions regarding corporate culture, the #MeToo movement and sexual harassment in the workplace. This year the statement explained how the company’s corporate purpose aligns with its long-term strategy, discussed board oversight of culture and included new ESG disclosures.
This article originally appeared in the latest Corporate Secretary special report.