The pandemic forced a change in the annual shareholder meeting format. According to this past summer’s annual conference of The Society of Corporate Governance, more than 2,000 issuers held a virtual shareholder meeting (VSM) in the 2020 season—an increase of more than 500%.
Since it’s more likely that digital meetings – whether pure or hybrid – will become the norm in the future, we wanted to offer some insight into common myths about VSMs.
Myth: Face-to-face annual meetings are always better than remote meetings.
While holding an in-person meeting seems like it should be a more engaging experience, it often results in low shareholder participation and voting. With an increasing number of companies looking to grow shareholder engagement and reduce expenses from in-person meetings such as travel for board of directors, venue security and onsite staffing, remote meetings provide a viable alternative.
But for virtual meetings to be an acceptable substitute to face-to-face meetings, companies need to use technology that provides “equal access” to all shareholders.
Myth: Every online meeting should be a video call rather than audio only.
Issuers should consider many factors when deciding on the best format for their annual meeting, including available resources, nature of the items of business to be voted on, composition of the shareholder base, historical attendance, level of comfort with new technology, and shareholder appetite. Each company should look at its particular facts and circumstances, evaluate all of its options, and hold its annual meeting in a way that bests serve the needs of the company and its shareholders.
Myth: All virtual meeting providers are the same.
Not all providers deliver the same services, including project management, file processing, document distribution, tabulation and technical support. Avoid a cookie-cutter approach when selecting a VSM provider. Match your organizational culture to your provider for best fit. For example, does a smaller, high-touch provider align with your support objectives or is a large do-it-yourself provider best for your firm?
Myth: Implementing a virtual annual meeting solution is a large technological undertaking.
For shareholders and issuers alike, the adoption of virtual technology is simple and straightforward. In addition, companies who moved to a virtual shareholder meeting this past proxy season found them to be less expensive and less time-consuming, according to data provider MyLogIQ.
Running a virtual meeting is as simple as accessing a web page or using an app on a mobile device. The use of mobile is ubiquitous – more people own a mobile device than a desktop computer – and its functionality is simple to use.
Myth: Hosting a virtual meeting will disengage shareholders.
One of the biggest ways to engage shareholders is through a virtual annual meeting. According to a 2020 report from Intelligize, a LexisNexis company, companies in industries with 100% adoption rates cited increased shareholder attendance and participation as compelling reasons to go virtual. Consider it another way to connect with investors and facilitate their participation in the annual meeting.
Myth: A virtual meeting does not offer the same level of accountability.
Virtual shareholder meetings make it possible for issuers to offer more convenient ways for shareholders to vote on important decisions like new board members and corporate leadership. They offer the same transparency as a physical meeting, ensuring that the board is still held to account.
The technology already exists, enabling shareholders to vote live during the meeting and ask questions. Real-time questions can be moderated, if required, and can even be displayed to the audience, promoting further discussion. And with some platforms, it’s still possible to allow for verbal questions – using speaker queuing technology.
Myth: A virtual meeting isn’t secure.
Multiple features are put in place to keep VSMs secure, from anti-hack platforms to tight security protocols to secure cloud-based networks. The security of a virtual meeting is paramount to any facilitator. What’s more, any shareholder entering a virtual meeting platform needs to be authenticated.
Now that we’ve debunked several myths about virtual shareholder meetings, you can see that they are not that different from a physical meeting. Mediant has been supporting corporate issuers' annual meetings and proxy events for many years. Our virtual meeting solution, MIC Digital Shareholder Meeting (MIC DSM), is fully supported and designed for virtual and hybrid annual meetings to drive online attendance and engagement. Remote shareholders can fully participate in the annual meetings as shareholders can vote in real-time and ask questions of the board via their preferred channel: computer, tablet or mobile device.
For more information about virtual shareholder meetings, contact firstname.lastname@example.org. To learn more about MIC Digital Shareholder Meeting, download the overview.