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In the second episode of The Public Company Series Podcast, host Doug Chia sits down with Matt Filosa, Senior Managing Director of Governance and Sustainability at Teneo. The conversation traces the arc of shareholder engagement from its earliest days through the current environment — one where pro- and anti-ESG forces, regulatory uncertainty, and institutional caution are reshaping how companies and investors communicate.
Filosa brings a rare dual perspective. He spent 15 years on the buy side doing stewardship, proxy voting, and corporate governance before joining Teneo eight years ago. That background informs a nuanced view of how engagement went from awkward first steps to a sophisticated practice — and why it now risks losing the two-way dialogue that made it valuable.
Say on Pay and the Spark That Started It All
Before Dodd-Frank, shareholder engagement wasn’t a defined practice. Filosa traces the origin to shareholder proposals pushing for say on pay — an import from Northern European markets that caught corporate America off guard. Aflac was the first company to voluntarily adopt the practice, and the broader reaction was immediate: companies wanted to know what investors thought.
The challenge was that investors didn’t fully know what they thought yet either. Both sides entered early conversations still figuring out their positions. When Dodd-Frank mandated say on pay for all U.S. public companies, those small-scale discussions scaled overnight. Every portfolio company wanted a call. Every investor had to formulate a view.
What followed was a learning period. Investors with no deep background in executive compensation found themselves representing large institutional positions in comp discussions. Companies and general counsels were, for the first time, getting a window into how the buy side actually evaluated governance issues. Filosa describes the exchange as genuinely productive — both sides learning from the other’s perspective, with proxy access as one example of where engagement led to reasonable common ground.
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The Capacity Problem Nobody Warned About
The explosion in engagement requests quickly overwhelmed the investor side. Early on, Filosa’s team adopted a simple rule: never refuse an engagement. It didn’t last. The volume made it untenable, and the teams had to build triage mechanisms to prioritize which meetings to take.
Chia notes the irony: investors had been clamoring for companies to engage, and now those same investors were too overwhelmed to accept every meeting. From the corporate side, a response of “no need for a call this year” became informal code for “we plan to vote with management” — a signal companies learned to parse carefully but couldn’t always rely on.
Both sides adapted. Investors developed letter-writing campaigns to communicate voting intent at scale. Companies learned to read between the lines of non-responses. But the underlying tension — a system designed for meaningful conversation struggling to operate at volume — never fully resolved.
The Transactional Turn and Its Unintended Consequences
Over time, engagement took on a transactional quality. Investors began framing success in terms of corporate behavior change: if a company destaggered its board after an investor recommended it, that counted as a win. The dynamic created an implicit exchange — do this and we’ll vote with you; don’t, and expect a vote against.
Filosa acknowledges this model drove some positive change. But it also made the relationship more adversarial than necessary and may have blurred lines around 13D and 13G filing obligations in ways that weren’t fully appreciated at the time. Under a different SEC administration, the same conduct might draw a different interpretation — which is essentially what happened when new guidance came out this year.
The larger concern is structural. When engagement becomes a transaction rather than a conversation, both sides optimize for short-term outcomes instead of building the kind of understanding that helps navigate genuinely new issues.
Anti-ESG Activism Enters the Ring
Pro-ESG had what Filosa calls a “bull run” — roughly 15 years of operating virtually unopposed. ESG-focused shareholder proposals, institutional backing from the largest asset managers, and a supportive regulatory environment all reinforced one direction.
The anti-ESG movement changed that. What makes it notable isn’t just the opposing agenda — it’s the playbook. Anti-ESG proponents adopted the same tools: shareholder proposals, name-and-shame campaigns, social media pressure. And by several measures, they’ve been effective. Filosa argues that low vote support on anti-ESG proposals doesn’t tell the full story. Pro-ESG proposals have similarly low support right now. The real metric is corporate behavior change — and companies rolling back ESG commitments is a list the anti-ESG side points to as evidence of success.
One particularly effective tactic: filing standard governance proposals, like separating the board chair from the CEO, under an anti-ESG banner. The ask is identical to a pro-ESG filing. The preamble is different. This puts proxy advisors and investors in an uncomfortable position — voting against a proposal they’d normally support simply because of who filed it.
Two-Way Dialogue Under Pressure
Chia and Filosa both return to a core theme: the value of shareholder engagement lives in two-way conversation. Companies tell their story. Investors share their perspective. Both sides leave with information they didn’t have before.
That model is under strain. The SEC’s 13D and 13G guidance spooked institutional investors. Many suspended engagements while legal departments assessed the implications. Others entered engagement season in “listen only” mode — participating in calls but declining to share views.
For companies, this undermines the whole point. If investors won’t disclose what they want — whether it’s continued ESG reporting, specific governance changes, or anything else — companies are left guessing at their disclosure strategy. The practical question becomes: should we keep publishing this data if our largest shareholders won’t tell us whether they value it?
Filosa’s advice is direct. Companies should keep asking the questions they’ve always asked. If an investor says they can’t answer, that’s fine — the question itself isn’t a penalty. He even describes pre-clearing the approach with heads of stewardship at major firms, confirming that being asked an unanswerable question won’t count against a company. Sometimes the art of the question matters as much as the answer.
Redefining Who Counts as a Shareholder
The conversation also tackles a more fundamental question: who should companies engage with?
Historically, the definition was broad. If an organization sent a letter or filed a proposal, companies felt obligated to respond. Filosa describes how that cost-benefit calculation has shifted. Eight years into repeated engagements with the same proponents on the same issues, with no movement on either side, the question becomes whether continued engagement is worth the resource investment.
Chia raises the example of animal rights organizations that don’t hold shares themselves but find a supporter to file a proposal, then conduct all the negotiating. Exxon’s successful effort to exclude certain shareholder proposals made a version of this argument — that some proponents don’t have the financial interests of the company in mind.
The advice isn’t to cut off engagement entirely, but to apply a real cost-benefit analysis. Some conversations still produce rich, productive exchanges. Others have reached a stalemate where further meetings serve neither side.
Tying It All Together
Across every topic — ESG crosscurrents, regulatory shifts, capacity constraints, and structural changes at the largest investment firms — Filosa keeps returning to the same concern: the conditions that made shareholder engagement most valuable are eroding.
Two-way dialogue is harder to sustain when investors are legally cautious, politically pressured, and structurally fragmented. Companies are left with fewer signals and more uncertainty at exactly the moment governance decisions are becoming more complex.
The episode doesn’t offer easy answers. What it does offer is a clear-eyed look at the forces reshaping shareholder engagement — and a case for why preserving genuine, two-way conversation remains essential, even when the environment makes it harder to have.
Keep that work inside your governance record, not a public chatbot.
About The Author
- Ashley Merder is the Senior Manager of Brand Marketing at OnBoard, where she leads brand strategy, content, social presence, and creative direction. With over a decade of experience working alongside a nonprofit board, she brings a mission-driven perspective to B2B SaaS. Her work focuses on making strategy visible using clarity, discipline, and design to shape how the brand is understood, trusted, and experienced.
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