The Shareholder Forum

supporting investor interests in long term enterprise value

 

Purpose & History of Services

The Shareholder Forum

The Shareholder Forum supports investor interests in corporate enterprise value with services that require independence – and that may benefit from the Forum’s network resources and recognition for advocacy of long term investor interests – to assure a definition of relevant issues and fair access to information that can be relied upon by both corporate and investor decision-makers.

The policies that provide a foundation for the Forum’s marketplace functions have been carefully developed and tested to allow any investor to participate in its communications, either anonymously or visibly, without acting in concert. Established originally to accommodate professional fund managers, this independent moderator function has proved to be consistently effective in managing orderly processes of issue definition for rational analysis by fiduciaries who are responsible for informed decisions.

Initiated in 1999 by the New York Society of Security Analysts with lead investor and former corporate investment banker Gary Lutin as guest chairman to address the professional interests of its members, and independently supported by Mr. Lutin since 2001, Forum programs have achieved wide recognition for their effective definition of important issues and orderly exchange of the information and views needed to resolve them. The Forum's ability to convene all key decision-making constituencies and influence leaders has been applied to subjects ranging from corporate control contests to the establishment of consensus marketplace standards for fair disclosure, and has been relied upon by virtually every major U.S. fund manager and the many other investors who have participated in programs that addressed their interests.

Currently important applications of the Forum’s independent position include the support of corporate managers who wish to provide the leadership expected of them by responding to activist challenges with orderly reviews of issues relevant to long term investor interests.

Requests for Shareholder Forum consideration of support may be initiated confidentially by any investor or by the subject company, or by the professional advisors to either.

 

For a report of the initiation of Intel's experiment in the virtual shareholder meeting processes addressed in the article below, see

Note: Intel Corporation is a Leadership Supporter of the current Shareholder Forum's "Say on Pay" program addressing investor communication issues, and is represented on that Program Panel by Cary Klafter, referred to below as the company's executive officer responsible for relevant policies.  Timothy Smith of Walden Asset Management, referred to below as the leader of activist investors opposing purely "virtual" electronic annual meetings, chairs the Focus Section for Say on Pay Advocates of the Forum's clearinghouse project managed by the publisher of Corporate Secretary.

 

Corporate Secretary, January 25, 2010 article

 

Crossbow logo People on the street

Intel scraps online-only annual meeting

Jan 25, 2010

Investor outcry forces chip giant to rethink plans

When Intel first announced plans to move its annual shareholder meeting exclusively online, the company did not anticipate the shareholder backlash. ‘We thought it was going to be completely non-controversial. We just have local retirees come to the physical meeting,’ says Cary Klafter, Intel’s VP of legal and corporate affairs and corporate secretary.

Last year Intel, using software developed by Broadridge, was one of the first companies to allow shareholders to participate in the annual meeting by going online. The goal was not only to decrease cost, but also to promote greater shareholder participation. In 2009 more shareholders attended the meeting from their living rooms than in-person. Hoping to build on that success, in the fall of 2009 Intel announced plans to move its 2010 annual meeting exclusively online.

Some shareholders balked at the decision. Timothy Smith, senior VP of Walden Asset Management’s environmental, social and governance group, believes virtual meetings create a ‘disembodied experience’ for the shareholder. If you are alone at home or in your office, ‘how do you know for sure if other investors are also concerned about x or y?’ Smith asks.

Smith was broadly supportive of Intel’s use of the virtual meeting and online voting in combination with its physical meeting last year. His concern is that moving entirely online may lead to widespread adoption of virtual meetings at companies ‘that do not have the high standards of governance that exist at Intel.’ This, in his opinion, could be damaging to shareholder rights.

A shareholder resolution filed with Intel, including signatories from Walden Asset Management and United for a Fair Economy (UFE), states, ‘We believe the tradition of in-person annual meetings plays an important role in holding management accountable to stockholders. In contrast, online-only annual meetings could allow companies to control which questions and concerns are heard and manipulate the exchanges between shareowners and the company. Face-to-face annual meetings allow for an unfiltered dialogue between shareholders and management.’

The resolution also asks Intel to establish a corporate governance policy affirming the continuation of physical meetings. While Klafter understands shareholder concerns, he reminds investors that ‘it is the corporate governance philosophy and practices of individual corporations that determine if any tool, such as the web-only meeting, is used in a forward-looking manner or not. The tool itself is not inherently problematic and of course there have been examples of poor practices by issuers at live meetings.’

For the time being, however, Intel has acquiesced to shareholder pressure and agreed to hold off on its plan to conduct this year’s meeting exclusively online. Smith applauded Intel’s handling of the situation: ‘Intel could have challenged the resolution and to their credit they sought a win-win situation before that happened.’

Investors opposed to virtual meetings are expected to soon formally announce a Coalition to Preserve Shareholder Meetings. In the fall the coalition plans to host a conference to discuss best practices companies can adopt in order to protect shareholder rights during virtual meetings. Intel has agreed to participate in the conference. In the meantime, Klafter says Intel will continue to do the ‘best we can to effectively mimic the physical annual meeting on the web.’ He has even hinted that that he may have even found a solution to getting web participants a cup of coffee.

By
Katie Feuer
 

 

 

 

Inquiries, requests to be included in email distribution lists, and suggestions of new Forum subjects may be addressed to inquiry@shareholderforum.com.

Publicly open programs of the Shareholder Forum are conducted for free participation of all shareholders of a subject company and any fiduciaries or professionals concerned with their decisions, according to the Forum’s stated "Conditions of Participation." In all cases, each participant is expected to make independent use of information obtained through the Forum, and participation is considered private unless the party specifically authorizes identification.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.