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Jan 29, 2019

How ConocoPhillips’ Kinney drove a successful engagement campaign

Shannon Kinney was named the 2018 governance professional of the year (large cap)

Shannon Kinney has what could fairly be called a wide-ranging portfolio at ConocoPhillips – and one that has posed considerable challenges over the past year.

She became deputy general counsel for governance, corporate and commercial, and chief compliance officer, in December 2017, and is also the company’s assistant corporate secretary. In addition, she manages a team tackling ConocoPhillips’ legal matters in corporate finance, executive compensation & benefits and commercial, as well as global compliance and ethics matters.

Kinney drafted and managed the preparation of the company’s 2018 proxy statement, making several key improvements as a result of investor outreach. These included enhanced disclosure around board refreshment and diversity, board and committee evaluation and nominating processes, and the director qualifications and skills matrix. The results of her work helped lead to greater shareholder support – and landed a spot on the short list for this year’s best proxy statement (large cap) award.

The revamped proxy statement was part of Kinney’s response to ConocoPhillips securing just 32 percent shareholder support for its 2017 say-on-pay vote. Following that vote, she set up and took charge of a governance leadership team with the aim of driving a successful turnaround through engagement.

According to Mary Ytterberg, general corporate and securities counsel with ConocoPhillips, Kinney personally contacted more than half of the company’s shareholders, then co-ordinated and took part in face-to-face meetings of the governance leadership team and directors with investors holding more than one third of outstanding shares, plus phone meetings between the team and investors holding an additional 5 percent of shares.

In part, this dialogue led to enhancements in corporate governance, environmental, social and executive compensation activities, Ytterberg says. It also helped lead to a markedly different response from shareholders: the next advisory approval of executive compensation passed with more than 92 percent shareholder support – up 60 percentage points over the previous year. It is a huge success, clearly showing the value of improved engagement and proxy disclosure.

ConocoPhillips held its first virtual AGM in 2017, but investors made clear they preferred to meet in person. Having listened to this feedback, Kinney obtained board approval to switch back to a traditional format but with a live video webcast and the option to submit questions online ahead of the meeting. It’s another example of her ability to forge effective relationships with investors.

‘This year, Shannon Kinney has proven she understands the business of ConocoPhillips and concerns of its stockholders,’ Ytterberg says. ‘She invests in and inspires others – at ConocoPhillips and in the community – by her inclusive, encouraging nature, dedication to all she does and continuous learning. She is able to lead and work within a multi-disciplinary setting to achieve consensus and successful resolutions. Her governance skills make her an invaluable asset to ConocoPhillips.’

This article originally appeared in the latest Corporate Secretary special report. Click here to view the full publication.