Corporate & Securities Law Blog
Broc Romanek and
Dave Lynn are
Editors of TheCorporateCounsel.net
November 29, 2007
SEC Adopts Rules to Facilitate Shareholder E-Forums: My Ten
As noted in this
press release and Corp Fin Staff
statement, the SEC also voted to amend
the proxy rules to facilitate the use of electronic shareholder forums.
The rules enable participation in an electronic shareholder forum, which
could potentially constitute a solicitation subject to the current proxy
rules, to be exempt from most of the proxy rules if the exemption
conditions are satisfied. Here is a
statement from Chairman Cox.
What does this mean? The demise of the traditional annual meeting? No
more shareholder proposals (the rule itself doesn't prohibit proposals,
but maybe shareholders will find better avenues for their concerns and
wishes)? Or will nothing happen? With Web 2.0 in its infancy, I think it's
too soon to tell what the future holds.
Borrowing very liberally from Gary Lutin (who has done a related
podcast described below), here is a
10,000 feet level perspective on how e-forums might work effectively:
- The nature of a forum process depends on the issue or agenda that's
defined, and on who's attracted to participate. If a genuinely open forum
is established to address value issues, I think it will attract a fairly
broad range of "mainstream" investors interested in how management will
make the company successful.
- Rather than a narrow constituency that's attracted to protest
rallies, corporate managers can - and should - make effective use of the
"forum" processes themselves to define issues, rather than simply respond
once someone else has defined an issue.
- A genuinely open forum can actually be a very effective means for
management to understand and respond to investor concerns, assuming one
defines the agenda properly and keeps it on track.
The Future? Independent Shareholder Forums
Quite an interesting person with some great ideas - and who has
executed some of these ideas! (that's the hard part) - Gary Lutin, CEO of
Lutin & Company and Founder of
ShareholderForum.com, shares some insight
into how an independent shareholder forum works in this
podcast, which includes discussion on:
- What is ShareholderForum.com?
- How do the shareholder forums work?
- Can you describe what happened recently with the forum devoted to
- What should be the goals of independent shareholder forums?
- Broc Romanek
Posted by broc at