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The issues and views reported in the article below had been addressed a year ago by the Shareholder Forum's “E-Meetings” public interest program, and are generally summarized in these articles:


Timothy Smith, the senior vice president of Walden Asset Management who is quoted in the article below, was a member of the “E-Meetings” Program Panel that established consensus standards for communications associated with shareholder meetings, and Walden was one of the program's initiators.

Broadridge Financial Solutions, Inc., was also an initiator as well as a leadership supporter of the "E-Meetings" program. However, referring to the services that the article reports Broadridge is offering, it should be understood that the Broadridge services described as a “Shareholder Forum” are not associated with or endorsed by the Shareholder Forum, and that the Forum has not granted anyone permission to use its name.


Pittsburgh Post-Gazette, December 6, 2011 article


Description: Post-gazette NOW



A virtual kind of meeting

As shareholder sessions go online, companies see benefits, but investors are wary

Tuesday, December 06, 2011

By Deborah M. Todd, Pittsburgh Post-Gazette

When DynaVox's board of directors gather Wednesday for their annual shareholders meeting, they may be the only participants in the room.

For the second year in a row, the South Side-based speech technology company announced in October that the annual shareholders meeting would be strictly an online affair.

Investors were sent instructions to download proxy statements and annual reports, and were encouraged to reject paper proxy votes in favor of online or telephone votes to "reduce administrative and postage costs."

DynaVox representatives declined to comment for this story but the company's meeting notices said the e-proxy process will "expedite our shareholders' receipt of proxy materials, lower the costs of distribution and reduce the environmental impact of our annual meeting."

Costs aside, investors are expressing mixed feelings about the practice, which has grown exponentially since the online meeting technology was introduced in 2009 by Broadridge Financial Solutions, a Lake Success, N.Y.-based brokerage processing services company.

What started with four virtual meetings in the introductory year grew to 28 last year and reached 39 as of Friday, according to Broadridge. More than half of those meetings were conducted exclusively online without an option for investors to attend in person.

On one hand, virtual meetings allow investors from around the globe to plug in, even as they ease the burden of organizing a meeting space, and perhaps offering refreshments, for companies who only see a handful of their investors show up anyway.

On the other hand, some investors call online-only meetings inadequate replacements for an opportunity to meet company leaders in person, and they say the technology supporting the meetings falls far short of emulating real-life experience.

"I think shareholders are excited about the potential of virtual shareholder meetings to increase participation. The potential is huge in that respect," said Glyn Holton executive director of the United States Proxy Exchange, a Boston-based nonprofit organization for shareholders' rights.

"At the same time, the technology can be used adversely in ways that don't facilitate communication, but actually hamper communication."

He noted his own difficulties signing in to Broadridge's 2010 virtual annual meeting as an example. Mr. Holton said he spent more than half an hour dealing with technical difficulties, and was told by customer service representatives that "a lot" of people were experiencing similar problems. A company official told him only three or four people experienced difficulties logging in when he raised the issue during the question-and-answer session.

Broadridge officials said the technology "has functioned as designed and without incident in each of the meetings where it has been used to date."

Even if the technology operates to its fullest potential, some say it's not enough to replace a face-to-face encounter.

Companies can choose to operate online meetings with either an audio stream or an audio/video stream. Companies also have the option to choose whether everyone included in the meeting can read the questions that are submitted, and whether certain questions are addressed at all.

The audio-only stream raised the ire of some investors last year during the annual meeting for Symantec Corp., the Mountain View, Calif.-based computer security company that owns Norton Security.

After the meeting was over, shareholders discovered only eight of the company's 11 directors decided to show up, despite the fact that they were voting whether to keep the directors in place. Shareholders also complained that the company only answered two questions, despite multiple online submissions.

This year, the company hosted a live meeting with an online option for shareholders.

Symantec was the first Fortune 500 company to host an online-only meeting, and Timothy Smith, senior vice president of the Boston-based social and environmental investment firm Walden Asset Management, thinks that company's experience could be a cautionary tale for what could become regular occurrences if too many choose that route.

He said any company with a significant public relations problem could duck the toughest shareholder questions under the online-only format.

"Imagine News Corp. having a virtual-only meeting this year and shareholders having to send questions by email [from] around the world; there would have been an outraged cry," he said.

News Corp. has been embroiled in an ethics scandal involving the phone-hacking of celebrities and even a murder victim, a scandal that triggered the shutdown of its News of the World publication.

Kelly Howard, Broadridge's vice president of corporate communications, said the company follows guidelines established by state laws that give companies a great deal of freedom regarding how they conduct meetings.

Companies hosting annual meetings in person are not required to have question-and-answer sessions, and there is no law in the 21 states that allow online-only meetings requiring both audio and video streaming.

Broadridge's "Shareholders Forum" software allows companies the option to display questions submitted and lets shareholders communicate during online-only meetings. Next year, the company plans to introduce an option beyond the Shareholders Forum to list questions submitted online.

However, it is up to individual companies to decide if they want to include those options as part of their meetings.

"State law affords issuers significant leeway in conducting in-person annual meetings. Similarly, the Broadridge service is flexible," wrote Mr. Howard in an email statement.

Mr. Smith said many companies who conduct online meetings are not using them for the purpose of subterfuge, but he noted that keeping investors away from company officials makes some question why they're being shut out of the process.

He understands the benefit to companies who only see a few investors show up at annual meetings, but he said the online-only process should be a concern for investors who think their companies have something to hide from shareholders.

"I bet if we had a vote on having an in-person meeting for a company with even a whiff of controversy, we'd have a high vote in favor," he said.

Deborah M. Todd: or 412-263-1652.

First published on December 6, 2011 at 12:00 am

Copyright ©1997 - 2011 PG Publishing Co., Inc.




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