Some companies are hoping to avoid in-person challenges at the annual meeting by scheduling virtual-only online session. The Council of Institutional Investors, whose members have $3 trillion in assets under management, has also spoken out strongly opposing virtual only meetings and the pension funds of New York City are voting against directors serving on board Governance Committees of companies moving to virtual-only meetings. Of course, in-person meetings enhanced by virtual participation for those who cannot otherwise attend is entirely different and should be encouraged.
The Sisters of Saint Francis of Philadelphia have taken the lead in challenging these decisions with shareholder resolutions at ConocoPhillips and Comcast. The Conoco resolution has already been cofiled by the Church of the Brethren Benefit Trust and the Needmor Fund, a Walden client. The Sisters have also filed a similar resolution with Comcast.
Walden’s Tim Smith stated, “The decision to move an annual meeting to cyberspace has moved far beyond a minor internal management decision and become an important governance matter for companies. Imagine if companies facing major controversies had decided to forgo physical meetings. If a company faces debate on their comp package or its climate change position or has votes on shareholder resolutions it is also a problem to have a disembodied discussion on line for a stockholder meeting.“
On Thursday May 11, the National Center for Public Policy Research’s Free Enterprise Project (FEP) will seek to ask Ford Motor Company executives if they believe there is a reputational risk and potential consumer backlash from advertising on television news programs hostile to the Trump Administration. FEP representatives are hoping for the opportunity to pose this tough question during Ford’s first online-only shareholder meeting.
“Ford executives will be tested to see if they are willing to tackle hard questions at a virtual shareholder meeting where they control access,” said National Center Vice President David W. Almasi. “When liberal politicians wanted to avoid angry constituents during the Tea Party movement, they held virtual meetings to avoid uncomfortable interaction. We are hoping Ford executives will not employ the same strategy. Annual meetings are the one time a year when shareholders can question corporate leadership. To restrict that opportunity would be a disservice to the investment community.”
The Ford shareholder meeting will be held on May 11 at 8:30AM eastern in an audio-only format accessible through the Ford website.
Shareholder meetings may seem like highly ritualized events that only pretend to offer meaningful interactions between companies and the investors who own them. But it is undeniable that these events are the only time each year when investors can direct questions to company officials and air their praise or grievances.
Timothy Smith is the director of environmental, social and governance share owner engagement at Walden Asset Management, which oversees $3 billion. He often attends shareholder meetings and presents proposals on issues to be voted on by investors.
“These are not management’s meetings, they are the meetings of the owners of the company,” Mr. Smith said. Online-only events give company officials “tremendous power over controlling, censoring and really limiting the engagement of share owners with the board and management.”For decades, companies’ meetings were actual gatherings, often held at headquarters or nearby. In recent years, companies have added online functions, allowing increased participation by shareholders who cannot travel to the events. Investors have welcomed these hybrids.
But a growing number of companies have moved to online-only shareholder meetings. Last year, 154 companies conducted such events, up from 21 five years earlier, according to Broadridge Financial Solutions, which sells virtual shareholder meeting services.
Source: Meet the Shareholders? Not at These Shareholder Meetings – NYTimes.com