Tag Archives | annual meetings

Virtual Meetings: Can Shareholder Proposals Stem the Tide?

virtual meetingsVirtual meetings are quickly being adopted by entrenched boards who fear any attempt by shareholders, especially retail shareholders, to hold them accountable. Annual meetings are the only place shareholders are likely to meet with the managers and boards of the companies they invest in, as well as with employees of those companies and with other shareowners. Comcast (CMCSA) spins their May 16 meeting as one that “will provide expanded shareholder access and participation, improved communications and, over time, cost savings for our shareholders and company.”

Virtual Meetings: The Liecomcast

If their real concern was to please their shareholders, Comcast would hold a hybrid meeting — allowing shareholders to attend in person or via the Internet. Don’t let them fool you, Comcast is locking out its shareowners to avoid embarrassing questions and accountability, not to reach out and communicate with their shareholders or to save a few dollars on coffee or a room rental. Shareholders are not clamoring for virtual-only meetings. The Council of Institutional Investors ($3 trillion in member assets) maintains a policy favoring hybrid meetings but clearly opposes stand alone virtual meetings:  Continue Reading →

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Fiduciary Duty to Announce Votes (Part 1): Editorial Calls For Advanced Disclosure

A recent editorial in Pensions & Investments (P&I), Winning over proxy voters, essentially argues that pensions have a fiduciary duty to announce their proxy votes in advance of the annual general meeting (AGM) if doing so is likely to influence the vote. This minor extension of current practice could have a profound impact and should also apply it to mutual funds and investment advisors, as well as other institutional investors, such as endowments.
The editorial discusses Warren Buffett’s recent reluctance to vote against the pay package at Coca-Cola.

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Corporate Governance: Stepping Back in Time

MrPeabodysWayBackMachineFive years ago in Corporate Governance

Publisher’s Note: Yes, you’ll find many broken links. After 5, 10 and 15 years, the internet moves on. Many of the organization’s linked have since gone under. We’re just glad to still be here, offering our readers a sense of the history we have shared. 

Since 2005, KLD has studied the S&P 100’s sustainability reporting practices for the Sustainable Investment Research Analyst Network, a working group of the Social Investment Forum. The 2008 Sustainability Report Comparison reveals encouraging news. Of the 100 largest U.S. publicly-traded companies, 86 maintain corporate sustainability websites and 49 produced sustainability reports in 2007. Continue Reading →

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Funds Should Attend More Annual Meetings

The Financial Reporting Council (FRC), UK’s independent regulator “responsible for promoting high quality corporate governance and reporting to foster investment,” is also in charge of the Stewardship Code for institutional investors.

The FRC, 230 pension schemes, fund managers and service-providers have  signed up for the Stewardship Code, including “most of the major investors in UK equities.” According to Financial News (Shareholders: Turn up to meetings!, 12/14/2011), the FRC not only warned companies Continue Reading →

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Shareowners Too Busy But Hamermesh Offers Wrong Solutions

Lawrence A. Hamermesh, Widener University School of Law, Wilmington, Delaware gave the Keynote Speech to the Practical Law Institute’s Ninth Annual Directors’ Institute on Corporate Governance on September 7, 2011. In Too Busy to Think, Spread Too Thin to Matter: Making a Rational Stockholder Voting System an Agenda Item for Management/Investor Dialogue, he runs over some interesting territory and concludes we need to limit the number of shareowner meetings and votes to make them more meaningful.

Prof. Lawrence A. Hamermesh

One option is to “require a stockholder vote on the election of directors once every three years, unless owners of more than, say, 3% of the voting power demand a meeting in the meantime.” Another would be to “dispense with annual meetings” but substitute “some enhanced stockholder right to ballot access and to convene stockholder meetings.”

I agree there are problems but these “solutions,” especially the first, could lead to even less accountability than we have now. Hamermesh reminds his audience of Chancellor William T. Allen’s 1988 opinion in Continue Reading →

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2011 Berkshire Hathaway Meeting Notes

After 6 hours of continuous typing and close to 15 hours of editing, my notes from this year’s Berkshire Hathaway annual meeting are complete. At the end of it all, the total tally is over 18,000 words and over 24 pages of wisdom from Buffett and Munger. As always, these notes were taken by hand, without the use of a recorder. For those of you who were not able to make it to the meeting this year, I hope the notes serve as an Continue Reading →

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IR Makes Use of Social Web: AGMs?

While many companies are using social media to push out investor relations information, global conferencing firm PGi (NYSE: PGI) is among a rare few that is also using social media in two-way conversations with investors.

During the company’s recent Q4 earnings call, PGi Senior Vice President of Strategy & Communications Sean O’Brien, who was an equity analyst and portfolio manager before crossing over to the corporate world, used StockTwits to highlight key figures from the company’s results and was on-hand to answer questions from investors…

In an interview with IR Web Report, O’Brien says Atlanta-based PGi, well-known to IR professionals as the service provider behind 1 in 4 earnings calls, views social media as just another way to communicate with external stakeholders, one that soon won’t seem unusual.

via PGi makes investor relations social | Dominic Jones, IR Web Report, 3/21/2011.

It would interesting to see similar tools used by directors at annual meetings. (see The Annual Meeting: From Gloss to Dialogue) Disclosure: The publisher of CorpGov.net has a very small long position in PGi.

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Fix AGMs: 100 Words or Less

A message from Jim Kristie, editor and associate publisher of Directors & Boards:

Annual meetings can be a frustrating and often futile exercise — in meeting statutory requirements, yes, but not much else as a worthy vehicle for demonstrating corporate leadership and enhancing shareholder relations.

Thus, the cover story for the first Directors & Boards issue of 2011 will be: “What’s Wrong with the Annual Meeting . . . and How to Fix It.” It comes out later this month.

The seed of this idea was planted this past summer when I was a peripheral participant in a study group looking at “Electronic Participation in Shareholder Meetings” — i.e., the pros and cons of virtual annual meetings and the practices necessary to satisfy the needs of all parties. This group was organized by a close colleague, Gary Lutin, through The Shareholder Forum initiative that he chairs.

The virtual annual meeting will be a dimension of the discussion, and possibly factor in as a key fix. And there will be other fixes that we should focus on for recrafting the annual meeting for a coming governance era of heightened transparency and disclosure.

Perhaps you participated in the survey that we sent last month to our e-Briefing audience. The results of that survey will be presented in this cover story.

Whether you participated in the survey or not, I welcome you to hit me with your best idea — in 100 words or less — for what could and should be done to bring the annual meeting of shareholders into the 21st century. Email me at [email protected].

Depending on editorial space, I will group the responses into a “The e-Briefing Readers Speak” sidebar piece of the cover story. Do it quickly, because the article is being wrapped up this first week of February.

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Annual Meeting Conduct

In the past we have reported on various outrages that have sometimes occurred at annual meetings, like when Whole Foods Markets denied an opportunity for a shareowner proponent to to present their resolution before the vote was taken in 2006. Months later, they issued the following response (Hole Foods Digs Out, 7/2006):

After researching common practices with regard to the presentation of shareholder proposals at annual meetings, we have decided to allow some form of presentation during the formal portion of next years(sic) annual meeting from shareholders who have properly submitted a proposal which has been included in out proxy statement… and will work with our voting agent to improve the timing of the release of the final voting outcome for all proposals.

Broc Romanek has done a great service to both issuers and shareowner activist by publishing a recent survey regarding annual meeting conduct. Now companies won’t have to bother “researching common practices.” (Survey Results: Annual Meeting Conduct, theCorporateCounsel.net Blog, 7/20/10)

1. To attend our annual meeting, our company:

  • Requires pre-registration by shareholders – 5.9%
  • Encourages pre-registration by shareholders but it’s not required – 13.2%
  • Requires shareholders to bring an entry pass that was included in the proxy materials (along with ID) – 5.9%
  • Encourages shareholders to bring an entry pass but it’s not required – 11.8%
  • Will allow any shareholder to attend if they bring proof of ownership – 57.4%
  • Will allow anyone to attend even if they don’t have proof of ownership – 33.8%

2. During our annual meeting, our company:

  • We hand out rules of conduct that limit each shareholder’s time to no more than 2 minutes – 20.9%
  • We hand out rules of conduct that limit each shareholder’s time to no more than 3 minutes – 26.9%
  • We hand out rules of conduct that limit each shareholder’s time to no more than 5 minutes – 4.5%
  • We announce a policy that limits each shareholder’s time to no more than 2 minutes (but rules are not handed out) – 7.5%
  • We announce a policy that limit each shareholder’s time to no more than 3 minutes (but rules are not handed out) – 3.0%
  • We announce a policy that limit each shareholder’s time to no more than 5 minutes (but rules are not handed out) – 0%
  • There is no limit on how long a shareholder can talk (subject to the inherent authority of the Chair to cut off discussion at any time) – 37.3%

3. For our annual meeting, our company:

  • Provides an audio webcast of the physical meeting, including posting an archive – 25.0%
  • Provides an audio webcast of the physical meeting, but does not post an archive – 7.4%
  • Has provided an audio webcast of the physical meeting in the past, but discontinued that practice – 1.5%
  • Is considering providing an audio webcast of the physical meeting but haven’t decided yet – 4.4%
  • Provides a video webcast of the physical meeting (or is considering doing so) – 1.5%
  • Does not provide an audio nor a video webcast of the physical meeting – 60.3%

4. At our annual meeting, our company:

  • Announces the preliminary results of the vote on each matter (unless special circumstances arise such as a very close vote) – 92.7%
  • Doesn’t announce the preliminary results of the vote on each matter – 7.4%

I don’t recall if Romanek has been doing this survey for several years but it would be nice to know which way some of these items are trending. I would fully expect more companies are offering webcasts but are they becoming more restrictive or less restrictive concerning entry passes and how long a shareowner can talk? More importantly, are meetings open to the press (if so, does anyone bother to attend?) and is the Q&A portion of meetings becoming longer or shorter?

The NIRI also conducted a similar unscientific poll, which also breaks down some information on what shareowner proposals have been submitted and acted on. However, because of the small sample size, it isn’t very helpful on those types of questions.  Hat tip to Gary Lutin for bringing the NIRI poll to our attention.

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