The Shareholder ForumTM

Electronic Participation in Shareholder Meetings

Forum Home Page [see Broadridge note below]

"E-Meetings" Home Page

"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


June 4, 2010


Participant Questions and Comments


What can be done with electronic participation in meetings:

Last week’s question about what services and technologies are needed for electronic communications has stimulated more attention to what processes companies can use as well as to how they might use them. This week’s Focus Report, below, offers some insights from the relatively well-developed marketplace for analyst conference calls. Taking that as a starting point, we’ll be taking an in-depth look in coming weeks at some of the important tools and techniques and the ways companies are leveraging them. To guide our progress, please let us know what you’d like to see covered.


What are the responsibilities of directors for investor communications?

The often controversial subject of director responsibilities for investor communications has been raised in the context of E-Meetings, both in terms of (a) the board’s duty to oversee the communications and (b) the individual director’s actual engagement in the communications. We are looking into the possibility of organizing another special project workshop to prepare a report on these issues for Forum participants to consider. It would be important to carefully define such a project in order to keep it within the scope of the E-Meetings program. We welcome any advice you can offer.


News Digest


The views of SEC Regulation FD reported in this article are common, but not supported by the actual rule and the SEC’s clearly stated purpose "to promote the full and fair disclosure of information by issuers." There is nothing in the rule that excludes "governance" information from its requirement of fair disclosure.

Board communication with investors was the subject of a cover story in the monthly Corporate Secretary magazine, distributed to Forum participants yesterday. In addition to the article’s excellent review of a range of board responses to investor representatives concerned with corporate governance and voting issues (as distinguished from those concerned with valuation and capital commitment,) it also showed some of the confusion relating to applications of SEC Regulation FD to investor communications. In examples of fairly common views, the article described beliefs that FD restricts rather than requires communication, and, also inexplicably, that the rule does not require fair disclosures of “governance” information such as compensation reports since it “does not bear in a material way on an investment in a company’s stock.”


Meeting Observations


Best Buy, previously reported to have scheduled its shareholder meeting for June 24 at 9:30 a.m. Central Time, has provided preliminary indications of plans for video webcasting and online participation supporting the company’s commitment to the “Connected World.” We expect to report more details next week.






What We Can Learn


Real Marketplace-Tested Practices


Conference calls for analysts covering quarterly earnings reports, which have evolved over the past decade after the enactment of Reg. FD in an atmosphere that emphasized fairness, have become a well-tested communications process from which there is much to be learned for the conduct of annual meetings.


Both quarterly calls and annual meetings have a lot in common. In both, management provides decision makers with pertinent investment information. In both, investors have an opportunity to ask questions and observe management's responses. And both commonly use a similar format of a presentation followed by a Q-and-A session.


Because of the large volume of conference calls – they are held by thousands of companies four times a year – they have become a well-tested form of the processes for providing fair access to investment information. Importantly, for our purposes, the testing has emphasized fairness. “The current practices of open analyst conference calls were developed deliberately to avoid the disclosure abuses that contributed to the corruption of securities markets we saw in the dot-com era ten years ago, and are now widely accepted as fair to everyone concerned,” says Peter Brennan, managing partner of Damel Investors LLC, whose actions helped establish marketplace reforms and Reg FD.


So what can conference calls teach us about what works, which practices are commonly used, and which cutting-edge technologies are emerging on the investor communications horizon?


Widely accepted practices


First, let us identify the main elements that most calls include and which have become common enough to be considered conventional for quarterly calls:

      The scheduling and access information for the open conference call is publicly announced, usually on the company’s web site as well as by press release. Timing is typically less than an hour after the planned reporting of financial results for the completed quarterly period, but some companies have been scheduling up to a day between reporting and the call to allow more thorough investor consideration of the reports and preparation of questions.

      Telephone and/or internet access is open to all, allowing all investors and analysts to observe, usually with audio, with or without slides, and in some cases with video.

      Nearly all calls start with recitations of legal statements, followed by scripted management presentations about performance in the recently completed period.

      A Q-and-A session that provides for investor and analyst questions, usually through a limited number of call-in lines. Variations include submission via internet, with varying visibility of submissions.

      Archived calls that are available for replay for defined periods. Companies store their archived calls either with a service provider or on their own site.


Tools companies use


For providing open access, the dominant technology is webcasting, which means the event is broadcast over the internet, enabling anyone throughout the world to observe the meeting. Both audio and video presentations can be webcast, with audio alone being less expensive and prevalent in the US market.


To add a visual element, companies can accompany audio webcasts with slides, which participants can watch by clicking using a mouse. A more advanced visual presentation involves encoded slides, which enable the presenter to control the order in which the slides are shown. Newer technologies allow companies to insert pre-recorded segments into a live presentation, or webcast a pre-recorded presentation as part of the conference call.


The next level of communication involves various forms of video streaming, which, like plain audio, can be webcast for participants to view in real time or in archived form by clicking a play button. With the cost of videostreaming having steadily decreased in recent years, more and more companies are using the technology. Depending on the configuration, costs of video can now run as little as a couple of thousand dollars more than an audio webcast. More advanced levels of videostreaming include high definition video or video transmitted via satellite. Video may well become standard practice in coming years. Use of video has soared by 75% in Thomson Reuters’ webcasting business from 2008 to 2009, the company says, and, another conference call service provider, expects companies that are trying to set themselves apart to start using webcasts for all their events.


Both in audio and video webcasts, companies can incorporate additional technologies required for Q-and-A sessions, as well as for other two-way communications such as surveys and polling. They can also use an expanding array of tools to collect and analyze data on access activity.


Q-and-A sessions are considered by far the most important element of conference calls, as they enable participants to ask management questions and observe its responses. Most webcast conference calls provide a public one-way communication accessible in listen-only or view-only mode to all online observers. The questions are usually communicated separately through phone lines, with the sound plugged into the webcast, requiring a number of phone lines to accommodate the anticipated volume of calls. Costs can be significant for a large number of open phone lines. Internet alternatives to phone lines for voice communication are possible, but not in common use. Written submissions by internet are becoming more practical, and some companies testing of processes to present submissions on live chat sections of webcast screens.


With regulations and investor interests encouraging companies to archive their presentations, most companies store their webcasts or arrange for the webcast service provider to make archived replays available. There is a growing appreciation of the value of allowing continuing investor replays. “They elongate the life of the event,” says Michael Cotter, global head of corporate communications at Thomson Reuters. For every visitor on the live event, two or three visit the archived presentation, he says.


Emerging Trends


According to several leading service providers, more and more companies are experimenting with interactive capabilities such as opening discussion boards before a meeting, or including polling during or after the call.


And as technology continues to advance, some are entering social webcasting in full force, something that ON24, a service provider that emphasizes leading edge virtual event technologies, and Thomson Reuters have begun offering. In addition, companies are paying more attention to accessibility through mobile devices such as smart phones and tablets that are increasingly popular with the investors and professionals they need to reach. And of course, at a time that use of technology is an important part of a corporate image, there is always a need to keep up with rivals.




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.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

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.