Each year, we see more companies electing to hold virtual-only shareholder meetings, for which the benefits are clear: (1) it’s easier to coordinate; (2) it’s less expensive; and (3) most annual meetings don’t amount to much. However, the disadvantages of virtual-only meetings loom large for certain investors.
A few active investors and pension funds like the NYC Comptroller’s Office have spoken out against the practice, claiming that virtual-only meetings “deprive shareowners of important rights” and “stifle criticism”. Additionally, the Council of Institutional Investors (CII) has taken the stance that virtual meetings should be used only as a supplement to traditional in-person meetings, not a substitute.
This episode of Inside America’s Boardrooms is broadcast from our new studio location at The Conference Board in New York City. We welcome back Doug Chia, Executive Director of The Conference Board Governance Center, to debate the pros and cons of virtual-only shareholder meetings—and to predict what actions investors may take against the practice.
I think everybody would agree that most corporations and executives are trying to do the right thing—they’re trying to run their business for the benefit of the stakeholders…The problem is the bad actors are the ones that get most of the attention and really create the mistrust of corporate America that we’ve seen building over the years.
Host TK Kerstetter and Chia discuss current trends in virtual shareholder meetings and explain what advantages and disadvantages boards should consider as they assess whether virtual-only meetings are suitable for their shareholders.