There is much debate over the topic of virtual annual shareholder meetings. From hybrid meetings to virtual only meetings, shareholders and companies are not yet aligned on which approach is best and most appropriate. In the press, some companies have been slammed by shareholders for conducting virtual meetings. Shareholders are sensitive about the topic because, among other things, they want to ensure their voice and rights are not limited or restricted in a virtual forum selection presented by an issuer. I have read many pros and cons but I believe the overarching takeaway for companies to consider is to be extremely thoughtful of the investor when conducting a virtual meeting.
Due to the wide debate, a committee comprised of interested constituents, retail and institutional investors, public company representatives, and proxy and legal service providers have joined forces to prepare this Best Practices Committee for Shareowner Participation in Virtual Annual Meetings. Good timing.
See this excerpt from the 12-page report:
There is debate over virtual shareowner meetings. Virtual participation in shareowner meetings presents an opportunity for shareowners that cannot travel to more easily attend and participate. Some endorse virtual-only shareholder meetings, noting that few shareholders physically attend smaller companies’ shareholder meetings. Others, including some committee members, are concerned that virtual-only participation could diminish the ability of shareowners to fully participate and have their questions and concerns heard without the risk of management exerting excessive control. In particular, if virtual technology is used to replace in-person meetings, in this view, the only opportunity for shareholder engagement with independent board members may be lost.
Read the full report, here.