Virtual shareholder meetings (VSMs) continue to grow in popularity. According to the Harvard Law School Forum on Corporate Governance, the number of issuers hosting virtual-only meetings in 2023 was close to the all-time high set during the pandemic.
Shareholders are growing more accustomed to digital meetings — whether virtual-only or hybrid — but some questions and doubts remain. In this blog post, we want to dispel some common myths about VSMs and help issuers understand best practices for hosting a digital event.
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 in the last couple of proxy seasons 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 VSM. According to a report from the Nasdaq Center for Board Excellence, rather than being opposed to digital events, some investors have specifically asked for VSMs in their shareholder proposals. When handled according to best practices, VSMs can improve shareholder engagement by facilitating broader participation in annual meetings.
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, a BetaNXT business, 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, voting in real-time and asking questions of the board via their preferred channel: computer, tablet or mobile device.
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