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Electronic Participation in Shareholder Meetings

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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


April 30, 2010


Dear Forum Participant,


Your questions continue to come in and we thank you for that.  Please keep them coming.


Participant Questions


What are the legal and administrative requirements for shareholder participation in an annual meeting?

The legal and administrative requirements for e-meeting participation are complicated and vary to some extent from state to state. We are therefore organizing a workshop to report on these requirements and have invited several experts to help guide the project: Cathy Conlon, the vice president responsible for “virtual” meeting services at Broadridge, Carl Hagberg, an independent inspector of elections and editor of The Shareholder Service Optimizer, and Frank Zarb, a securities law partner of Katten Muchin Rosenman.


Broc Romanek, the editor of who provided last week’s helpful perspectives, has also scheduled a September webcast for corporate secretaries and others who want to learn how e-meetings are done. For information about listening in, see his posted announcement: "Holding the Virtual Annual Meeting: Factors to Consider and Practice Pointers."


When is the Forum’s open meeting?

We are in the process of selecting a date in late June or early July for the Forum’s open meeting. We are trying for a Tuesday, Wednesday or Thursday afternoon from June 29 to July 1, or July 13 to 15.  Please let us know if you are aware of any conflicting events during those weeks.


News Digest


Two articles were distributed to Forum participants this week on the challenges of investor communications. In one, IR Magazine reported preliminary corporate experience with the new “notice and access” process for electronic distribution of proxy statements, including concerns about reduced response rates for retail investors. In the other, FT’s Agenda reported on the widespread institutional investor practice of delegating shareholder voting decisions to proxy advisory firms and specialized staff employees, separating those decisions from the investment decisions of portfolio managers. The article referenced the recent paper by Charles Nathan of Latham & Watkins that explains what he characterizes as “parallel universes” of voting and investing decision-makers.


In another article, the New York Times reported on the increased use of videoconferencing for business meetings, referring to the pioneering leadership in this practice by Procter & Gamble. As you may recall, we reported last week that P&G had just adopted changes in its governance provisions to allow the use of electronic communications for future shareholder meetings. 


Meeting Observations


For those of you interested in observing the previously reported American Water example of an e-meeting, it’s scheduled for next Friday, May 7, at 10 a.m. Non-shareholding Forum participants can access the meeting by clicking on the following link, then on the middle blue-lined box that says “American Water Virtual Shareholder Meeting” and next on “Other Attendees.”

Read more about American Water’s strategy in our focus article below.


Dell Inc. (NASDAQ:DELL; $32 billion) has told us that they, too, have decided to conduct this year’s annual meeting, scheduled for July 16, with electronic communications for both questions and voting. We’ll be reporting more in the next week or two on their objectives and on how they will coordinate them with their pioneering Dell Shares investor-relations blog.





Web Attraction: American Water Uses Electronic Communications to Draw Shareholders to its Annual Meeting


American Water Works may be a 124-years-old company, but when it comes to its upcoming 2010 annual meeting it is on the forefront of using technology to maximize shareholder participation.


For non-shareholding Forum participants who want to observe the meeting, see the instructions in the main briefing section, above.

The May 7 meeting, to be broadcast live from the company’s “traditional” meeting at its Voorhees, NJ headquarters, will allow shareholders to vote and submit questions electronically during the live meeting.


The company’s objective is to give access to a greater number of stockholders as well as encourage and maximize shareholder participation in the annual meeting. Recent rule changes that restrict broker votes on behalf of clients make it more important than ever to encourage retail investor participation, says Muriel Lange, manager of investor relations at American Water.  In addition, American Water views the annual meeting as another opportunity to extend its commitment as a tech-savvy and investor-friendly company.


“Technology allows us to take our annual meeting to a level beyond regulatory compliance and obligations as a public company and to give our shareholders even greater access to executive management and the board,” says Lange.


This is the first time that American Water, which trades on the NYSE under the symbol “AWK,” will run an annual meeting in this manner. The company, which was spun off from German parent RWE, broadcast its first annual meeting, in 2009, but did not enable electronic participation at that time.


It so happens that soon after the $1.25 billion IPO the annual meeting landscape began to change. In 2009 the SEC came out with Notice & Access rules for electronic distribution of proxy materials, and in 2010 the NYSE issued Rule 452 to restrict broker voting for clients. For the largest investor-owned U.S. water and wastewater utility company, with customers in more than 30 states and in Canada, it meant working even harder to re-establish a solid retail base, and that meant making the most of technology. “The new rule (452) has the potential to impact voting levels at the meetings,” Lange says. “What participation in virtual meeting has enabled us to do is to reach out without soliciting and saying ‘you are welcome to participate, you don’t have to leave your desk.’ We think it is important this year more than ever to open that door.”


The company’s shareholder communications extend to before, during and after the annual meeting. First, the company sent out a pre-proxy mailing, educating and notifying shareholders of record of ways to participate in the meeting.  It then established the American Water Investor Forum – a web platform to provide shareholders with direct access to investor relations to ask questions and share their thoughts regarding the company and its strategic initiatives. The questions will be answered during the meeting, which includes a video as well as an online “exhibit booth” with interactive screens displaying the company’s latest technologies and sustainability efforts.


During the meeting, remote participants will be able to log in and listen and then push a button to view the video. They will hear the CEO’s presentation, the Q and A and a preliminary vote tally. They will also be able to vote and ask questions during the live meeting. The company’s management will answer as many of the questions as time allows, both those from the pre-meeting forum and from the meeting itself, Lange says. After the meeting, the company’s investor relations representatives will answer all remaining questions within 24-48 hours.


In 2009, about 120 people observed the meeting webcast, including analysts. Lange is not making any number predictions for this year’s more active form of participation, saying the company is more interested in the quality of engagement with its investors. “What’s important is the access,” she says.




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.