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Electronic Participation in Shareholder Meetings

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"E-Meetings" Program Reference


E-Meetings Review

a project of

The Shareholder Forum

in support of its program for

Electronic Participation in Shareholder Meetings


Participant Questions

News Digest

Meeting Observations

Focus Report


July 9, 2010


Participant Questions and Comments


New location for Tuesday’s open meeting:

For those of you attending the Forum’s July 13 meeting in person, please note that its location has been moved a few blocks to the Four Seasons Hotel, on East 57th Street in mid-town Manhattan. The 3:30pm ET starting time remains unchanged.


Provisions for electronic participation in Forum meeting:

Those of you choosing to test the kind of communication processes the E-Meetings program is addressing will be able to do so with a state-of-the-art audio webcast that allows online participants to join in the discussion with comments and questions. Following the previously reported example pioneered by Berkshire Hathaway, two journalists – Neil Stewart, editor-at-large of IR Magazine, and the editor of the Review – will be monitoring the online comments and presenting them orally as the participants’ delegates. This should keep the discussions natural and open, without having to shift to the audience-speaker exchanges required for conventional Q-and-A sessions.


Please remember that advance registration is required for either electronic or in-person participation in the meeting.


Expanded agenda for meeting:

Two invited experts will start the July 13 meeting with discussions of front-line observations and questions to be considered in managing shareholder meetings. This will provide an important, practical foundation for the subsequent discussions of standards.


News Digest


Broc Romanek, the editor of who will be conducting a webcast in September on practices for electronic shareholder meetings, reported this week on the recent increase in such meetings. In this context, it was announced on Wednesday that Computershare, the Australian-based company that provides registrar and proxy solicitation services, has just launched a “virtual meeting solution.”


Meeting Observations


In a holiday week after the end of the peak annual meeting season, there is nothing new to report about any of the meetings on our observation list.






When It’s Really Important to Understand and Respond

to Investor Interests 



Much can be learned from the way companies communicate when the stakes are high enough to justify whatever cost is required to win a vote. In such high-value decisions, as when management tries to get investors to support a merger, for example, companies pull all the stops. We have all seen how they hire lawyers, investment bankers, investor relations firms, proxy advisers, and even crisis managers. Then they start suing, going on road shows, meeting investors, and taking out newspaper ads.


This is a world apart from the communications associated with the routine annual meetings on the E-Meetings observation list. With no high-stakes voting decisions, there was no need for high-value communications, at least in relation to voting decisions. And that made us wonder what we might be missing.


A Professional’s Ten Tools

David Drake, CEO of proxy solicitation firm Georgeson, summarized the general steps his firm advises clients to consider as the importance of a proposal increases.

1.       Identify decision-makers at all the institutional investors with voting authority.

2.       Plan direct, face-to-face meetings or conference calls for the CEO, CFO and, in some cases, a board member to discuss issues with the investor decision-makers.

3.       Develop a professionally articulated explanation of why the proposal should be supported.

4.       Respond to any investor questions and reactions.

5.       Prioritize shareholders based on the amount of influence over voting result.

6.       Develop plans for lower cost communications with investors that don’t justify direct management communication.

7.       Meet with ISS and possibly other proxy advisory firms whose voting recommendations will influence some of the target company’s shareholders.

8.       Reach out to investors who may not vote out of apathy because, as Drake puts it, “they simply don’t pay attention to the material sent to them.”

9.       Use newspaper ads if needed to clarify voting issues.

10.   Conduct a forum if it can be controlled to present the issues without confusion.

Stop, Wait and Listen


One of the best examples of a high-value communication is what professionals call a “Stop, Wait and Listen” letter. Used as an immediate response to a tender offer, it gives shareholders a quick explanation of why they should defer their decisions until management has a chance to thoroughly consider and address investor interests.


So, the all-out contest starts with a promise to do everything possible to understand and respond to the information requirements of the company’s decision-making investors. And that’s exactly what follows.


Lots of old and new tools


The methods companies use to collect insights and send their messages out are more varied than ever. Most significantly, the new electronic tools provide much faster and lower cost means of communications, allowing increased quantity as well as quality.


“Teleconferences are huge,” says Mary Beth Kissane* of Walek & Associates and a board member of the National Investor Relations Institute (NIRI). “They are used a lot, and are a quick and inexpensive way to get the message out.” In addition, some companies use web-based “deal rooms” or “crisis spots” that can be updated continually in response to developments. They may also use social media tools, such as Face Book and Twitter, to alert investors to a new posting on their web site.


There are still good reasons to use the old tools, though. The traditional road show, for example, continues to be a commonly used and effective tool for medium and large companies, according to Kissane. “Investors still like to see management get on their hind legs,” she says.


More people to reach


High value decisions also involve more people. One reason is that decision-makers are more likely to consider what others have to say, which also makes it more likely that professionals – including analysts, proxy advisors, reporters, etc. – will want to say something. Another reason is that the escalated volume and frequency of communications in a high-value situation, especially with modern electronic tools, just draws more attention.


Dealing with this expanded audience requires work to understand what needs to be communicated, and then to put it in simple terms, says Kissane. “You need to persuade reporters, the ratings agencies, investors, and the influential financial press of the benefits of your case.” She emphasizes that these are professionals, and that what you tell them needs to be based on solid foundations rather than spin. And that means solid research.


So, dealing with the wide range of professionals and other influencers requires engaging your own professionals. Some people think this multi-layer filtering improves the quality of the information and assures broad access to it. Whether it does or not, it seems to be a necessary part of high-value communications.


Learning from crisis experience


What many professionals consider the most important thing they learn from their experience with high-value communication is to reduce the need for it.


Ronald Schneider of proxy solicitor Laurel Hill Advisory Group observes that communication during a high-stakes contest can be a lot more effective and less expensive if the company has established relationships with investors before the crisis. “Building a relationship can be critical in just plain getting through,” he says. “I have heard many investors say, if the phone rings and three companies are calling, I am more likely to pick up the phone from the one I know.”


Walek’s Kissane similarly thinks companies would be wise to hone their central message to investors on a continuous basis. Because electronic communication is fast-moving, a company can hardly afford to wait for a high-stakes situation to begin formulating its message.


Applying the observations


The first thing that an alert observer of high-value communications is likely to think about is the possibility that the significant cost efficiencies of electronic communications could make it practical some time soon, and maybe even now, to use some of those effective tools for routine applications.


Could it be justifiable to deliver some kind of electronic “Stop, Look and Listen” message that directs investor attention to key sections of a company’s 100-page proxy statement for an easily understood explanation of management’s proposed compensation plan? Or provide a video conference with managers to answer questions about it?


For many companies, these communication tools will prove to be more practical than teaching their CEO to play the ukulele.



* Ms. Kissane is a member of the Forum’s Program Panel for E-Meetings.




Avital Louria Hahn

E-Meetings Review, a Shareholder Forum project




© 2010 The Shareholder Forum




This Forum program is open, free of charge, to anyone concerned with investor interests in the development of standards for conducting shareholder meetings with electronic participation. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The organization of this Forum program was encouraged by Walden Asset Management, and is proceeding with the invited leadership support of Broadridge Financial Solutions, Inc. and Intel Corporation to address issues relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

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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.