In-person give-and-take at company shareholder meetings may soon be a thing of the past. But not if some major institutional investors have their way.
OK, we don’t have — maybe never have had — pure “capitalist democracy”. But “demos”, the voice of the people (in this case shareholders), has traditionally been heard loud and clear, even if limited, at company shareholders” annual meetings.
Now technology is intruding.
According to a revealing report in the New York Times, last year some 90 companies used a major provider of virtual meetings technology for such meetings: (“Not one shareholder showed up last week to Intel’s shareholders’ meeting last week. In person, at least.”)
Advantages for management are quite clear. Lower cost, hand-picked questions in advance, and more control of troublesome shareholders, especially embarrassing protesters. On the flip side, the losses: valuable informal repartee with shareholders, good will and a basis for further engagement with “rank and file” shareholders.
This is occurring increasingly at a time when a host of social issues are being brought forward in shareholder resolutions, as well as increasing support for adjustment in company policies and performance. Last month’s Exxon annual meeting (not online) saw a 38% supporting vote for increased company climate-change reporting.
These are some of the reasons why influential heavy-hitter shareholder groups such as the Council of Institutional Investors and the California Public Employees’ Retirement System oppose the online (as opposed to “hybrid”) shareholder meeting model.
Author of this Times DealB%k commentary Steven Davidoff Solomon summation is spot-on:
“next year … is a chance for each of these companies to bond with shareholders, not put them in a digital box.”