Online Shareholder Meetings: Why Virtual AGMs Face OppositionJanuary 26, 2018 9:31 am
Technology continues to change the ways companies do business, including their annual shareholder meetings.
In addition to the long-standing in-person format, some companies are also offering virtual versions concurrently. And there are some companies that are doing away with in-person meetings altogether in favor of virtual meetings, causing great distress among shareholders. What does 2018 hold?
In its recent report, the Financial Times states that companies’ reasoning for adding a virtual meeting is to make their annual event more accessible to global shareholders. The number of companies that have eliminated in-person meetings altogether in favor of online-only has risen from 155 in 2016, including Fortune 500 companies like Ford and Intel, to 212 in 2017. The number, the report adds, is still a small percentage of the total 3,600 public companies in the United States.
For some companies’ shareholders, the increased access and convenience that virtual meetings offer do not outweigh the ongoing need for physical meetings.
The Financial Times quotes the Sisters of St. Francis, a Philadelphia-based order of nuns that have attempted to convince ConocoPhillips to bring back in-person meetings.
“We want to look people in the eye when we ask our question and we want to see that person when they answer,” the order said.
In December 2017, the oil company relented and agreed to offer both physical and virtual meetings to shareholders. Union Pacific has agreed to do the same.
Some shareholders are being advised to “rebel” in certain circumstances if their company only offers online meetings. Other industry experts are stating that a move away from virtual meetings will hurt investors.
The Financial Times predicts that increase in online-only meetings sets the stage for a “big corporate governance battleground” in the new year.