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The article below was published in Agenda, a Financial Times private subscription service for corporate directors, and is presented with permission.


Agenda, September 13, 2010 article


The week's news from other boardrooms




Article published on September 13, 2010


Procter & Gamble’s board did an about-face when it agreed last month to continue holding in-person annual shareholder meetings for at least five more years, rather than experiment with an online-only version.

The decision came about four months after an April 22 8-K filing announced that the board had amended its bylaws to allow annual meetings to be held “solely by means of communications equipment as authorized by Ohio law.”

The board’s switch in policy resulted from a shareholder proposal on the issue. Eight days after the April 8-K filing, Jim Epstein, the chairman of EFO Capital Management and a descendant of co-founder James Gamble, sent a letter and submitted a resolution asking the board to adopt a policy affirming the continuation of in-person annual meetings in addition to Internet access to the meeting.

After negotiations between the board and Epstein, the two sides reached a settlement in August. Epstein agreed to withdraw the resolution in exchange for the company’s agreeing to hold a physical annual meeting for at least the next five years.

“We strongly support the use of new technologies to make annual meetings accessible to stakeholders who cannot attend in person.... But we do not believe that Internet-only meetings should be substituted for traditional in-person annual meetings.... Face-to-face annual meetings allow for an unfiltered dialogue between shareholders and management,” the resolution states.

P&G spokeswoman Jennifer Chelune says that while the board amended its bylaws, it had no definitive plans to hold an online-only meeting. “P&G seeks to continue to develop a deep understanding of the role digital plays in people’s lives. We are interested in interacting with consumers — and shareholders — in the format in which they want to be engaged. Increasingly, that’s online,” she writes in an e-mail.

The controversy over electronic-only meetings versus a hybrid option erupted late last year when Intel announced it would hold an online-only meeting. It was the largest company at the time to make such an announcement, although a handful of smaller companies have eliminated their physical meetings. The move by Intel upset shareholder activists who like to attend annual meetings to protest or ask management and the board questions face-to-face.

Like P&G, Intel also agreed to continue holding a physical meeting after receiving a shareholder resolution (though Intel did not agree to a five-year moratorium).

Meanwhile, the software company Symantec announced its Sept. 20 annual meeting will be online-only. Shareholder groups, including some in the U.K., are organizing a letter-writing campaign urging the board to rethink its decision and continue with the physical meeting as well.



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