Who Benefits From Virtual-Only Annual Shareholder Meetings
Much has been written recently on the trend of companies moving their Annual Shareholder Meetings to a virtual-only platform. Several publications have featured articles presenting the pros and cons of the virtual-only format. Generally, the articles and blogs defending this strategy cite two reasons: cost savings and increased access. The savings are obviously real. The company will spend less on a meeting that does not include an off-site room rental, security, and catering costs.
But are the savings significant? Are these large, billion-dollar corporations really burdened by this cost? While companies that have gone to virtual-only meetings use cost as a reason, many others continue to spend freely. Walgreens Boots Alliance, as an example, moved its meetings two years ago from its home city of Chicago to a hotel in midtown Manhattan, and held this year’s meeting at a resort in Scottsdale, Arizona.
The other reason cited by companies, increased access, demonstrates the difference between virtual and virtual-only meetings, and succeeds in raising the frustration level of shareholder advocates and others interested in good governance. Those fighting for the rights of shareholders are not opposed to a virtual component to the meetings. It’s obviously difficult for most shareholders, even those wishing to attend, to travel to meetings not in their areas. The Interfaith Center on Corporate Responsibility (ICCR), and other corporate responsibility advocates, consider it best practice to hold hybrid meetings, which include both virtual and in-person platforms.
The choice of holding a virtual-only meeting prevents interested shareholders from facing the chair, CEO and the board while they ask their questions. Arguments against these encounters discount the value of human interaction and reduces shareholders to little more than numbers on a ledger sheet. Surely, no company conducts 100% of its business, internal and external, virtually.
It’s also important to recognize that the execution of shareholder meetings, even virtual meetings, varies greatly. For example, Dupont, under former CEO Charles Holliday, held upbeat in person meetings in the beautiful Dupont Theater, showcasing new research and products. They accentuated the positive in an almost cheerleading way. Many companies, however, stick to the basics, robotically reading the rules of the meeting and getting through the business portion as quickly as possible.
Among companies holding virtual-only meetings is ConocoPhillips, which recently announced a move back to hybrid meetings; held what has been described as open and conversational Q&A sessions for shareholders. Comcast’s meeting, on the other hand, was run with rigid efficiency. Those posing questions were required to type their questions, which were them read by an operator. There was no opportunity for a follow-up. The only voices heard at last year’s meeting, other than one shareholder presenting a proposal, were of the operator and chair/CEO Brian Roberts. The board, in fact, was never introduced, raising the question of whether they even attended.
Shareholders, although owners of the company, have few opportunities to make their voices heard. Virtual-only meetings further erode those rights and insulate the board from outside opinions.
Associate Director, Corporate Social Responsibility, Sisters of St. Francis of Philadelphia