In-Person-Only AGM Workers-Risk-of-COVID

In-Person-Only AGM: Reckless Disregard

In-Person-Only AGM constitutes a reckless disregard of covid risk, notes shareholder advocate John Chevedden, regarding Dover Corporation‘s (DOV) decision. U.S. health experts are warning an emerging, highly contagious Covid omicron variant, called BA.2, could soon lead to another uptick in domestic coronavirus cases. Corporate governance continues to evolve. In a letter to the SEC, Mr. Chevedden wrote the following:

Ladies and Gentlemen,
DOV is having an in-person-only annual meeting. This is irresponsible because there is no accurate prediction of the covid risk throughout the Spring of 2022. Mandating an in-person-only meeting is a form of discrimination. 

It discriminates against shareholders over a certain age, for instance over age 60, and those who have a disability due to a compromised immune system. An in-person-only meeting is only for the young and healthy. And the young and healthy are the shareholders who are most likely to have a job that requires them to be on duty during normal business hours. The young and healthy are also the most likely to have daytime responsibilities for child-care and eldercare. 

Plus the company has 9 directors beyond age 60, including 4 directors beyond age 72. Thus an in-person-only meeting puts the brain trust of the director body at risk. The solution would be to excuse the directors from the annual meeting, which raises the question of why force shareholders to attend an in-person-only annual meeting when the majority of the directors are absent. Plus the directors who are thus absent will not have remote access to the annual meeting.

The reckless disregard of Covid risk is even more egregious because management will not even alert shareholders in the proxy to the possibility that the annual meeting may be switched to an online meeting at the last minute due to public health concerns. 

This is all the more important because in resisting proposals to require directors to obtain a majority vote for an election, managements at many companies claim serious harm from being deprived of the services of even one director.

— John Chevedden

Elsewhere

Note the Australian Institute of Company Directors advocated to provide companies extended flexibility in preparing for the upcoming AGM season. To mitigate the risks of COVID-related impacts on the upcoming AGM season, ASIC’s Corporations (Virtual-only Meetings) Instrument 2022/129 provides the following relief:

  • all listed companies, together with listed and unlisted registered schemes, will continue to have the option to hold virtual-only meetings until 31 May 2022 (an additional two months); and
  • all unlisted companies will have the extension until 30 June 2022, which aligns with the extended deadline for unlisted public companies with 31 December 2021 year ends to hold their AGMs.

I would bet many other countries provide options.

In-Person-Only AGM: My Own Position

I have always advocated for hybrid meetings, which allow the greatest flexibility to attend in person or online. I am beginning to see the possibility of virtual-only meetings if they meet a number of conditions. All meetings should:

  • Allow adequate time after the last presentation for shareholders to vote
  • Discourage cherry-picking questions. For example, displaying all questions asked to attendees and the press
  • Provide a separate Q&A session for items to be voted on before the polls are closed
  • Include the ability of shareholders to converse with each other and with company representatives using programs such as Gather or Bramble. Know of any public companies using such participatory software? Please let me know. I would like to invest in such companies.

“The overwhelming number of deaths, over 75%, occurred in people who had at least four comorbidities, so really these are people who were unwell to begin with,” according to CDC Director Dr. Rochelle Walensky, when discussing a study during a television interview that showed the level of protection vaccinated people had against severe illness from covid. Clearly there is a continuing need to protect those of us with compromised immune systems from undue risk. Dover Corporation’s reckless disregard should be condemed loudly so that others do not follow a similar path.

In-Person-Only AGM: Related Posts

Virtual Shareholder Meetings 2021

Virtual Meeting Problems Highlighted by CII

Virtual-Only Meetings: The Nuclear Option

   

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