In-person meetings should not be replaced, says CII director
Figures released this month suggest increasing numbers of companies are choosing to eschew in-person meetings in favor of online annual meetings.
Statistics published by investor communications firm Broadridge suggest more and more firms are opting to conduct their annual meetings over the internet rather than in person, in a bid to save time and money.
Chuck Callan, Broadridge’s senior vice president of regulatory affairs, says his company alone provided virtual services for 68 meetings in 2014, a clear increase on 2012’s total of 53. ‘Of these, about half were virtual-only,’ he adds. ‘The rest consisted of physical meetings offering an online component.’
For most companies, Callan continues, the choice is a matter of economy. ‘Many companies are interested in the cost-efficiency advantage over physical meetings,’ he explains. That being said, he also notes that companies ‘of all stripes’ use Broadridge’s services.
Guidance from the Council of Institutional Investors (CII), on the other hand, advises that replacing in-person shareholder meetings could be harmful for some shareholders, though the trade body ‘does not discourage the use of virtual meeting technology’.
‘With virtual-only meetings, shareholders may not be able to see all the questions and gauge whether they have been addressed, or see how they are being filtered before being addressed,’ explains Amy Borrus, CII’s deputy director.
‘Shareholders have very few opportunities to interact with the directors they elect to represent them, and it is not too much to ask that companies – once a year – provide a physical venue where shareholders can engage directors in person. If companies want to broaden participation through the use of virtual technology, that’s great, but it should not be the only avenue for shareholder-director communication.’
Borrus also notes that there is currently no uniform legal standard for how virtual-only meetings are conducted, particularly legislation to guide how companies ensure all shareholders’ are able to participate.
She adds that there are benefits to the technology, however, if used to expand investor interaction at meetings rather than limit it. ‘It can offer real pluses,’ she says. ‘Shareowners can watch and listen to the meeting, submit questions and vote their shares in real time. In some cases, virtual technology provides features that aren’t available to in-person attendees, such as the ability to ask questions anonymously.’
Since the launch of Broadridge’s services in 2009, the communications company has seen a steady uptake in its online technology, especially for holding shareholder meetings. The primary use, Callan says, is to provide access to meetings to the general, interested public in line with outreach efforts. ‘Our electronic shareholder forum service provides tools that are helpful to company executives, such as validation that a posted question is from an actual shareholder, or the tabulation of survey results against shares owned,’ he explains.
Laurie Havelock
Laurie has been part of the IR Magazine team for more than a decade, starting out as a reporter and research editor before becoming editor in 2023. He was previously acting business editor at the i newspaper and deputy business editor at The Daily...
