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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


May 14, 2010


Participant Questions and Comments


What are the plans for the Forum’s open meeting on Tuesday, July 13?

As reported earlier this week, the Forum’s open meeting to consider proposed standards for the fair conduct of shareholder e-meetings will be hosted by the New York Society of Security Analysts (“NYSSA”) in mid-town New York City on the afternoon of Tuesday, July 13, 2010. You will be able to participate either in person or by video-conferencing, demonstrating the kind of communication process the Forum is addressing. An agenda and meeting details will be reported within a couple of weeks.


Focus on a continuum of investor communications:

Comments by Forum participants have encouraged our focus on two issues. One is that annual meetings’ investor communications need not be confined to the formal meeting itself, but can become a continuing process. (More on that in this week’s Focus Report, below.)


The second is a concern voiced by a prominent activist that some corporate managers may misuse electronic communications “as an excuse to censor or limit shareowner input and discussion.” He observed that, “After all, this is a ‘Shareholders Meeting’ where investors should have the right to communicate with the Board and management, and not experience a pro forma affair with management rushing to end the meeting and cut off exchanges.”


These two perspectives converge in the view of investor communications as a continuum, which begins long before the meeting and enables investors to be fully informed by the time a voting decision is made. Now that technology allows significantly more efficient and adaptive processes, we have the opportunity to do things better.


News Digest


A preview of “Who speaks for the board?,” the cover feature in the new issue of Directors & Boards, was made available to Forum participants. The piece presented the responses of 18 corporate directors and advisers and stimulated our thoughts about board responsibilities for guiding as well as participating in the investor communication process.


Meeting Observations


Intel will be holding its annual meeting at 2:30 p.m. Pacific Time this coming Wednesday, May 19th, as reported last week. Their processes for investor communications are the subject of this week’s Focus Report, below.  


Yesterday’s Charles Schwab meeting, also reported last week, presents an example of an investor-oriented process – not surprising, since the company’s shareholder and client audiences are essentially the same – that combines a traditional in-person session with video webcasting and electronic processes for live voting and question submission. The surprisingly short question and answer session, with its single question and founding chairman’s genially expressed disappointment after days of preparation, can be viewed as a separate segment of the archived webcast.


NVIDIA Corporation (NASDAQ: NVDA; $8 billion) will be conducting its shareholders meeting on Wednesday, May 19, at 9:00 a.m. Pacific Time, with provisions for electronic voting and question submissions. The company’s director of corporate affairs, Rebecca Peters, volunteered the following view for Forum participants: “We’re always looking at ways to be open and transparent to our shareholders. Providing them with an online alternative way to participate in our annual meeting is a great way to do that. For shareholders, it’s easier than traveling to Santa Clara, Calif. And for the company, it’s relatively inexpensive and something we see as becoming a best practice.” You can observe the live webcast on Wednesday or watch the archived version later.







Intel’s New Moore’s Law for Shareholder Communications


Intel’s annual meeting may be scheduled for a couple of hours on May 19, but for all intents and purposes it had already begun on April 2. The company, which has enhanced its annual meeting electronic platform with added features has also expanded its duration to nearly two months of continuous interaction with shareholders leading up to and including live online participation in the meeting itself.


By taking these steps, Intel demonstrates that electronic participation can dramatically increase shareholders’ access to management beyond what can be achieved at traditional meetings. They also demonstrate how electronic communications, with such processes as posting all questions and comments for everyone to see, can assure more open and fair access than what had been possible at purely physical meetings.


Expanded shareholder questions – and answers


In its 2010 communications before and during the meeting, Intel is offering a record number of ways for shareholder participation. The pre-meeting message board uses technology that requires shareholders to enter a control number in order to vote and ask questions. Once ownership is verified, the technology assures that questions remain anonymous. At the same time, the platform displays all questions and answers for everyone to see.


Indeed, shareholder action on the pre-meeting message board has been strong. The company already had received 160 questions a week before the meeting – many times the number of questions that are typically answered at traditional meetings, including Berkshire Hathaway’s five-hour Q-and-A marathon (reviewed last week). That’s also roughly double the number of all in-person attendees Intel had in its meeting last year. And while the number of questions pouring in has exceeded the chipmaker’s expectations, Intel said it would answer all questions – those asked on the message board as well as those posed in-person or electronically at the meeting.


“We made a commitment to answering all the questions that come in,” says Peter Schuman, Intel’s manager of investor relations. “We had a lot more questions than we anticipated,” he added, noting that the company will answer all of them and is not filtering any. Of the 160 questions posted, Intel has already answered more than 25.


Many shareholders ask the same or similar questions on subjects like dividend and executive compensation, indicating broad interest. Therefore, says Schuman, the company will select several broad-interest inquiries and present them at the meeting. “We don’t try to duck some of the answers. We are upfront and center,” Schuman says.


Surveys of shareholder interests and priorities


In addition, Intel is using surveys that give shareholders additional opportunities to express their views. The results, which are posted online, also enable Intel’s management to learn which issues shareholders care about the most so it can address them in the annual meeting.


In one survey question, for example, preliminary results from more than 500 responding shareholders showed a significant majority favoring or more likely to participate in meetings electronically rather than in person. In another, the company asked shareholders what was the number one topic they wanted the company’s management to address, and an overwhelming majority of 71 percent named growth of new products and markets.


Access to business and financial information


The pre-meeting message board works hand-in-hand with another feature: shareholders’ ability to access a webcast of Intel’s investor day, held a week before the annual meeting. The webcast, of a full day’s dialogue between management and a probing audience of professional analysts and fund managers, provides shareholders with an efficient way to access an entire range of substantive financial information. Shareholders can watch any or all the segments and ask questions either on the message board or during the meeting.


Increased participation in more effective communications


Like many other companies, Intel is employing new technologies to expand and improve shareholder communication at a time when in-person attendance in annual meetings is shrinking and web participation is rising. This is happening as part of the broader trend of more personal and business activities migrating online.


Development of the communication processes demonstrated by Intel has been taking place for many years, but applications have been accelerating recently. Intel has been webcasting its annual meetings for a decade, at first enabling shareholders to simply observe the meeting. In 2008, when Intel provided a message board for investor questions, about 100 attended the in-person meeting while 100-150 listened to the webcast. And in 2009, when the company pioneered electronic online voting during the annual meeting, 85 attended in person and 216 observed online.


These increases in online participation, along with the early indications of a strong web participation in 2010, suggest that investors believe they are getting something that they were not getting from traditional meetings. Or, as Intel’s Schuman says: “We want to feel we are giving shareholders something, not taking away.”


Note: Intel Corporation is an invited leadership supporter of the Shareholder Forum’s program for Electronic Participation in Shareholder Meetings, according to the Forum’s policies applicable to public interest programs as stated in its Conditions of Participation.




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.