The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- It is one of the most persuasive examples we've seen of the current power of shareholder activism because it involves a company whose investors typically exhibit an almost religious allegiance to the corporate leadership and its products.

In late February, it was reported that Apple ( AAPL - Get Report) agreed to investor demands requiring a majority share vote in order for any candidate to be elected to its board of directors -- not just a simple plurality. It's no longer enough to get more votes than the other guy. Now you need real shareholder consensus on any appointment.

This change, rebuffed by Apple last year despite shareholder support for it, was spearheaded anew in 2012 by the California Public Employees' Retirement System (CalPERS), the largest U.S. pension fund and Apple's biggest investor. While Apple had originally warned that a majority mandate would create legal problems, the company responded well at day's end, accepting the decision with a cheery comment by general counsel Bruce Sewell that "this is Apple and we don't let complexity get in our way."
Apple's recent turnabout on a shareholder voting issue underscores the strength of shareholder activism.

Probably not, but the change at Apple underscores a fundamental power shift that goes beyond this one specific issue and provides a dramatic, hardly unique example of how ongoing shareholder activism has by no means abated over the last two years and continues to be strong in the wake of Dodd-Frank and the Consumer Protection Act. The message from academe is that "the traditional board centric model of corporate governance continues to gravitate toward a paradigm that includes an increased role for shareholders."

Translation: boards and management are now compelled to answer to often dissident shareholders demanding greater influence over the companies in which they invest. In this climate, boards must engage more directly with investors, and increase the frequency -- and enhance the quality -- of shareholder communications.

To be sure, 2012 has already seen its share of hectic shareholder activism in advance of this year's proxy season. In January, Illinois Tool Works ( ITW - Get Report), another perennially successful company, reached agreement with Relational Investors to allow it to nominate a board member in return for keeping its stake in the company below 10% and otherwise abstaining from commencing a proxy battle on corporate strategy.

Lesson: Apple and Illinois Tool show that it's not just beleaguered companies like Research in Motion or Yahoo! ( YHOO) that must duke it out with activist investors. It rains on the just and unjust alike.

The stakes go way beyond the specific governance disputes of any one public company. 2012 will be a pivotal year on a number of governance issues affecting the entire marketplace. Say-on-pay, proxy access, majority voting in director elections, board independence, corporate political spending will all remain in the spotlight. Companies that hope to avoid adverse votes on these key issues during the coming proxy season must revisit and update their communications strategies.

Nor is it just the large institutional investors like CalPERS or major shareholders that should concern companies. On such sites as,,, and MoxyVote, small shareholders are finding like-minded investors and combining their shares to push for reform.

Against this backdrop, clear, effective communication from the board and management to ensure that investors are well-informed about the company's business, governance policies, and long-term strategy for building value isn't just a bromide. The medium is the message as investors will likelier have confidence in companies that clearly articulate their strategies and that provide metrics and milestones as benchmarks for success. Weak messages or, worse, no messages at all, harden adversarial positions.

We're not just talking about glossy collaterals. Companies must be prepared to regularly meet with investors and enter into dialogue on the full range of governance issues. Only such engagement makes it possible to properly understand shareholder perspectives and address nascent concerns head on, especially when companies consider or support significant changes in governance or business strategy.

Companies must also be prepared to reach out to proxy advisors for analysis and recommendations. A proactive approach can potentially avoid negative recommendations in the first instance, and clarify company positions when misconceptions arise. At the same time, clear, concise, and accurate proxy statements can prevent proxy advisor misinterpretation and reduce reliance on proxy advisor recommendations.

Persistent monitoring of the social and digital media provides alerts to whatever dissension may be percolating along with early opportunities to rebut rumors and correct misstatements of fact before they circulate.

How companies react to their investors this proxy season may well set the tone for their relationship for years to come. If Apple can stumble, who can't?

Follow Richard Levick on Twitter@richardlevick.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.