States Relax Requirements for Digital Shareholder Meetings

We recently shared information about The Securities and Exchange Commission (SEC)’s guidance to help public companies, investment firms, shareholders and other market participants impacted by COVID-19 with upcoming shareholder meetings. This guidance enabled affected companies to announce changes in their meeting date/location or move to digital shareholder meetings without mailing additional materials or amending proxy materials.

Since then, we’ve seen more states – California, Connecticut, Delaware, Georgia, Massachusetts, New Jersey and New York – taking steps to relax requirements for holding digital or virtual annual meetings under existing state laws. For example, New York Governor Andrew Cuomo suspended the requirement for shareholder meetings to be noticed and held at a physical location. Also, Delaware Governor John Carney released a modification to an emergency declaration that addresses how corporations in the state may change a shareholder meeting scheduled at a physical location to one conducted “solely through remote communication” and at a different time.

We are all hoping that the COVID-19 pandemic will end soon. However, the reality is that timing remains fluid. Therefore, it’s possible that timelines for annual meetings in these states covered by the executive orders may be extended beyond the current expiration dates.

Navigating Through the Pandemic

During the last few weeks, we’ve seen companies flocking to virtual-only annual meetings. In fact, in a recent article in The Wall Street Journal, we cited that “Listed U.S. businesses usually hold more than 4,500 shareholder meetings between April 1 and June 30.” Furthermore, ISS Corporate Solutions, a Rockville, Md.-based consulting firm, stated that “So far this year, at least 920 U.S. companies had announced virtual meetings, up from 283 in 2019.”

Our President & COO Sherry Moreland recently talked to Agenda, a subsidiary of the Financial Times, about the rapid move by issuers to adopt virtual annual meetings. We introduced our MIC Digital Shareholder Meeting (MIC DSM) solution in January 2020. Ms. Moreland shared that the number of virtual annual meetings we’ve held for clients could be as much as 15 times original estimates during its first year of availability.

Ms. Moreland also provided insight about opportunities, challenges and considerations around holding virtual annual meetings during a recent podcast interview with Inside America’s Boardrooms. These include choosing the right provider, understanding company bylaws and working with your legal counsel to understand your state laws. Watch the full interview.

If we can help you with proxy or annual shareholder meeting solutions, or if you have any questions or concerns, please contact us at info@mediantonline.com. Also, to learn more about MIC DSM, you can download the overview