During the 2020 proxy season, the COVID-19 pandemic forced a change in the annual shareholder meeting format. Companies, shareholders, corporate governance advisors, and service providers all experienced many challenges, including a lack of familiarity with remote shareholder meetings, legal and compliance issues, and logistical hurdles.
A diverse working group and steering committee representing retail and institutional investors, public companies, and service providers recently published “Report of the 2020 Multi-Stakeholder Working Group on Practices for Virtual Shareholder Meetings,” a helpful guide for companies planning virtual shareholder meetings next proxy season. The report outlines baseline and evolving practices for improving virtual meetings, as well as updates a 2018 report of a similar industry committee that detailed principles and best practices for virtual shareholder meetings (VSMs).
Guiding Principles for VSMs
The following guiding principles have been generally accepted across key stakeholders groups and remain valid for the immediate future:
- Broad investor participation in annual meetings should be valued and encouraged.
- Shareholder meetings should promote equitable and equal treatment of investor participants.
- Opportunities for meaningful engagement between investors and boards should be provided.
- Issuers should communicate the benefits of a VSM to shareholders.
- VSMs should be used as a way to provide meaningful open dialogue between shareholders and companies.
Building off these guiding principles, the evolution of VSMs will be driven by the continual enhancement and innovation in technology, lower costs, as well as the learning curve for companies and their shareholders. As a result, the 2020 Working Group is collaborating on improving VSMs and encouraging companies to experiment with innovative practices and digital communications to enhance the experience of their shareholders.
Mediant is proud to be a member of the 2020 Working Group and we recommend that you read the full report, which you can access here.