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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


May 7, 2010


Participant Questions


Which functions of shareholder meetings do investors consider essential to their interests?

Some of you have pointed out the significant changes many shareholder meetings have undergone over the past few decades, both in content and attendance. This has raised an important question: What are the essential investor interests that must be fairly served by annual meetings? One, of course, is the shareholder’s right to vote. The other is the more nuanced function of communication. John Wilcox, the former SVP responsible for corporate governance at TIAA-CREF and now chairman of Sodali, concisely stated the purpose of this communication as being to satisfy “investors’ need to understand how their interests are being looked after.”  With so much riding on communication, this function demands more of our attention.


Inviting comments on investor communication objectives:

We need to know the full range of Forum participants’ views about what needs to be communicated, not only for investors to be informed but also for a company’s management to understand investors’ interests. You can comment privately or for attribution, according to your preference, but please tell us what you think other Forum participants should be considering.


News Digest


Berkshire Hathaway, Inc. (NYSE: BRK-A, BRK-B; $182 billion) displayed the ultimate example of a festival-style shareholder meeting this past weekend in a widely reported event that drew record-breaking attendance. For observations of what was done and how, including the electronic communication of questions for an otherwise thoroughly in-person meeting, see the Focus Report, below.


Meeting Observations


Intel Corporation (NASDAQ: INTC; $123 billion) is planning its annual meeting for May 19 at 8:30 a.m. Pacific Time. Shareholders attending via webcast will be able to vote and submit questions electronically during the meeting. Non-shareholder Forum participants can observe a live webcast from a link on this page.


The Charles Schwab Corporation (NYSE: SCHW; $22 billion) will hold its annual meeting on May 13 at 2:00 p.m. Pacific Time. Shareholders will be able to register for either virtual or in-person attendance. Virtual participants will be able to submit questions and vote during the meeting. Management will answer as many questions during the meeting as time allows. Non-shareholder Forum participants may observe a live webcast.


Those of you who did not watch the American Water annual meeting live this morning can watch an archived webcast. At the meeting, which was the subject of last week’s Focus Report, American Water answered some of its shareholder questions during the meeting, and committed to answering the others within 24 to 48 hours.





Berkshire Hootenanny Goes Electric with Q&A


Buffett and ukelele

 Rick Wilking/Reuters

Berkshire Hathaway presented the ultimate example of an annual meeting designed to maximize shareholder participation, attracting a record crowd of 37,000 to an extravaganza of shopping and entertainment that some say challenges the Christmas season. But while the company still did not webcast this 30-year-old annual ritual, it made clever use of modern electronic participation, harnessing the efficiency of email and the experience of three journalists to manage and prioritize shareholder questions.


Shareholders (and non-shareholding investors) were directed to email questions to one of three Berkshire-designated financial journalists – Carol Loomis of Fortune, Becky Quick of CNBC, and Andrew Ross Sorkin of the New York Times –  who would then select questions to be presented in the live meeting. The process is described in the “Procedure for Q&A Period” section on page 9 of the company's “2010 Annual Meeting Visitor's Guide.” CEO Warren Buffet and Vice Chairman Charles Munger then answered the questions during the meeting’s two sessions of two-and-a-half hours each, or a total of five hours.


The process, used the first time in 2009, replaced the earlier conventional format, when shareholders would line up in one of several zones of a giant convention center and take turns asking questions, the company said. But the first-come-first-served process was inefficient according to observers, and so the company replaced it with the current method using email and journalistic judgment to bring forth the most interesting and important questions.


Besides the innovative Q-and-A, Berkshire continues to demonstrate its unique approach to shareholders. While many public companies accept meager attendance as a given, Berkshire views and nurtures its shareholders as an affinity group of investors – and customers. It not only benefits by developing loyalty, but also from the millions in sales the event generates for its own businesses and for Omaha. An Omaha Chamber of Commerce spokeswoman did not have an estimate as to the sales the event generates for the city – "that's one of the age-old questions," she said – but some estimate the impact at around $50 million.


Offering discounts to its own retailers which include Borsheim's Jewelry, See's Candies and Nebraska Furniture Mart, Berkshire makes little secret that it loves when its shareholders spend money, even opening the doors to the giant Qwest Center as early as 7 a.m. for an extra dose of pre-breakfast shopping. It displayed everything from two black Coachman Recreational Vehicles and a replica of Burlington Northern Santa Fe engine to Kirby vacuum cleaners and Ginsu knives.


Drawing 37,000 attendees did not happen overnight. Berkshire has been nurturing attendance since 1981, when the annual meeting drew 12 participants. Berkshire recently made stock ownership easier by issuing a lower priced Class B retail alternative to its famously expensive, never-split common stock, and then added more shareholders with its Burlington acquisition. The combination of practices that encouraged participation and a greatly expanded shareholder base did their magic – boosting attendance to what’s assumed to be the world record.




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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