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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


June 11, 2010


Participant Questions and Comments


Does Reg FD apply to “governance” information?

Responding to the many questions stirred up by an article distributed last week, the Forum invited comments on the application of SEC Regulation FD to board communications with investors, and, particularly, to FD’s application to governance information. Yesterday, the Forum’s chairman, Gary Lutin, distributed an initial report of comments that resolved the question of whether FD was intended to restrict board communication with a simple “no” answer from the SEC. There also seemed to be broad agreement among experts – including Patrick Quick, the securities lawyer whose quoted observations had raised the questions, and Lynn Turner, who had been chief accountant at the SEC when FD was adopted – about FD’s application to “governance” information: whether or not the information is classified as “governance” is irrelevant. What counts is whether the information is “material.” Naturally, though, that gets complicated and raises more questions that may be of interest to professionals. Mr. Lutin has invited more comments.


Special project to address director responsibilities for investor communications:

Thanks to the leadership of David Silverman, managing director of Blue Harbour Group and chairman of the NYSSA committee for corporate governance, we will be proceeding with a special project suggested last week to address board responsibilities for investor communications. Mr. Silverman will be organizing a workshop to develop a report on “Communication Between the Board of Directors and Shareholders: Opportunities and Considerations,” presenting issues to be considered by participants in the Forum’s open meeting on July 13. Please let us know if you have any suggestions of issues or insights to include.


News Digest


Agenda, the FT weekly for corporate directors, addressed evolving board practices aimed at developing a better understanding of investor interests. Some directors are reported to be participating actively in shareholder meetings and analyst presentations, and there appears to be increasing attention to the role of investor relations officers in the competition for investors’ votes and capital.


Meeting Observations


Wal-Mart Stores, Inc. (NYSE: WMY; $190 billion) put on its usual show at last week’s annual shareholder meeting, as reported in the New York Times, inviting thousands of employees to join thousands of shareholders in a celebration of the company’s successes. To see the archived 12-segment video webcast of the festival and related material, click here.


We currently have an observation list of nine examples of shareholder meetings, ranging from big to small companies and from comprehensive to conventional use of electronic communications: American Water, Berkshire Hathaway, Best Buy, Dell, Intel, NVIDIA, Charles Schwab, Walmart and Warner Music. Please tell us if there are any other examples you think we should observe, or any communication processes you want to know about that are not covered in these examples.






Best Buy Connects the Worlds of Investors and Customers


Best Buy

Getty Images


In its upcoming annual meeting, Best Buy is planning to leverage the power of modern technology to establish direct and informal communication with shareholders participating from the comfort of their homes or offices.


Fireside Chat #4, October 23, 1933


Best Buy’s senior corporate counsel, Lisa Lentini, used the terms “town hall” and “fireside chat” to describe the atmosphere the retailer is seeking to create in the June 24 meeting as it webcasts from Richfield, Minnesota. Fireside chats, of course, evoke the direct, personal style used by Franklin D. Roosevelt in his famous 1930’s radio addresses that took his message directly to people’s living rooms.


“The presentation style will be a lot more direct and informal compared to previous years,” says Lentini. Viewing the meeting as more than just a formality, she explained that, “we really want to take this opportunity for investors and customers to understand what Best Buy is both culturally as a company and for its consumer brand promise.”


Using technology and direct, informal style Best Buy wants to highlight its brand message of a “Connected World,” where people can stay in close touch with their families, friends and colleagues anytime, anywhere. This vision of a connected world was emphasized in the company’s CEO’s letter to shareholders as part of Best Buy’s proxy filing.


The branding message of a dynamic, connected company that directly communicates with shareholders and customers has, of course, another point--Best Buy happens to be in the business of selling the communications technologies that enable people to create a connected world.


To keep the focus on the direct connection and the technology supporting it, meeting plans call for fewer speakers, shorter presentations, and changes in the presenters’ seating arrangements, the company says.


One of the company’s directors will join and greet the audience via video satellite. Those attending in person will be able to see the director on a screen at the meeting hall, while online participants will view him as part of the video stream webcast. The company will be using satellite video transmission to link him, the same way TV news broadcasts do it with reporters in distant locations. The application of sophisticated but familiar technology to the corporate event further highlights the theme of a digitally “Connected World,” Lentini says.


This is the first time Best Buy provides for electronic shareholder participation during the meeting. While last year the company webcast the event, it did not provide for online voting or the ability to ask questions. In addition to provisions for participation, the company has opened a message board before the meeting, which enables online participants to ask questions and answer surveys as well as vote in advance. Best Buy also created short videos of employee testimonials. These are attached to the message board, which was launched on May 14 and will stay open until a few days after the meeting.


The company says it will attempt to answer as many questions as possible at the meeting. Should some remain unanswered, the company will address them by replying to shareholders individually after the meeting, or, if appropriate, it may group related questions and post an all-inclusive answer.


As it enables existing and potential shareholders, customers, and other members of their connected world to sit in the comfort of home on June 24 and take part in the meeting via video stream, Best Buy is, in effect, reaching out to various audiences in disparate geographies in a kind of personal touch that – perhaps ironically – can only be done using remote communications technology.




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.