At last, there have been a couple of articles in the national press on the Symantec Corp. virtual-only meeting. First, Ross Kerber reported for Reuters, Shareholder meetings via Web mute dissident voices (9/24/2010) Kerber observed,
Soon movies might be the only place to hear pointed outbursts from investors. This year more than a dozen companies moved their annual meeting to online-only settings where they can rephrase or ignore contrarians.
Bruce Herbert, Steve Schueth, U.S. Proxy Exchange, CalPERS and CalSTRS were mentioned as opposing the move. Symantec claimed the fact that it included a pointed question on its performance during the online meeting, provided evidence it wasn’t stifling dissent.
Then on 9/26/2010 the New York Times published Gretchen Morgenson’s Questions, and Directors, Lost in the Ether.
Unlike other companies that broadcast video along with audio, Symantec held its meeting as audio-only — making it impossible for investors to observe the goings-on or see which Symantec executives had decided to make themselves available.
Symantec management read and answered only two questions from shareholders and failed to answer a question from Bruce T. Herbert, chief executive of Newground Social Investment. Morgenson also quoted several Symantec shareowners who were displeased with the audio-only meeting and she focuses on the fact that not all Symantec directors “attended,” although she was unable to find out who the missing directors were.
Morgenson mentioned the recent shareholder forum by Gary Lutin.
PARTICIPANTS in the forum have proposed these standards of fairness involving electronic shareholder meetings: a company should provide all shareholders with a reasonable opportunity to ask management questions relating to director elections and other matters to be decided at a meeting; a company should present those questions or views to management publicly so other shareholders can consider them; and, finally, a company should generate responses to these questions from managers or directors so other shareholders can consider them as well.
Morgenson ended her article with important observations from Lutin.
Most corporate managers also like being able to learn what interests their shareholders so they can respond before decisions are made. But it’s important to be alert to abuses that hide questions. If you want the marketplace to work, investors need to see which managers deserve their support.
Not mentioned in the article is the fact that Glyn Holton, of the United States Proxy Exchange (USPX), initiated the protest against Symantec. USPX appears to be on the threshold of building on the work of Lutin by
drafting a white paper detailing the legal, technology and procedural issues raised by virtual meetings. That will be followed with a members forum through which shareowners will draft shareowner-approved guidelines for the conduct of virtual meetings. Find out more and how you can be involved on our Virtual Shareowner Meetings page.
Long-term, we cannot address the issue of virtual meetings one company at a time. There are approximately 13,000 annual meetings in the United States each year. At some point, the trickle of corporations experimenting with virtual meetings will become a torrent. We need a comprehensive solution.
To that end, the USPX has formed the Coalition to Preserve Shareowner Meetings to pursue a two-pronged strateg:
1. Hold an on-line forum to draft shareowner-approved minimum guidelines for the conduct of virtual and/or hybrid meetings, and
2. Agree to sanctions the shareowner community will impose on corporations that conduct virtual meetings not in accordance with those guidelines.
Aside from Gary Lutin, members of the Social Investment Forum and public pension funds have mostly taken the lead in this area. We need others, especially retail shareowners to step up to the plate. I hope readers of CorpGov.net will join in those efforts by sending concerns and advice to firstname.lastname@example.org. I encourage individual shareowners, institutional shareowners and interested parties to join this newly forming coalition to participate in the forum and other activities. Join the USPX today. Member dues are modest and fund important activities.