As investors, one of our greatest responsibilities is to be involved in overseeing the companies we own. But far too often, shareholders are cut off from basic communication with the Board of Directors or CEO. Usually, Wall Street analysts get public access on a quarterly conference calls, but they're unlikely to rock the boat because they aren't shareholders and have corporate interests like investment banking to protect. Retail investors don't get the same opportunity, and often the annual stockholders meeting is our one chance.
Some companies have even taken steps to block media members from attending shareholder meetings to report what happens to a broader audience. At Groupon's (Nasdaq: GRPN ) first annual shareholder meeting this summer, the company closed its doors to media members, and only two outside shareholders showed up. TWO! Insurance broker Aon denied media members access to a shareholder meeting regarding a move of its corporate headquarters to London. Accretive Health (NYSE: AH ) also did not allow press at either of its past two annual shareholders' meetings.
So, why do companies choose not to allow the press to attend annual meetings, and why don't they open up such meetings to more shareholders by streaming them online?
The short answer is that talking to shareholders can be uncomfortable for company directors. For instance, at the time of its meeting, Accretive Health was dealing with a report from Minnesota's attorney general that was highly critical of the company's debt collection practices. At the end of July, Accretive agreed to cease operations in Minnesota for six years beginning Nov. 1. At a shareholder meeting with 9,000 shareholders, Sony's CEO Howard Stringer had to defend himself and his company's floundering financials. Robert Nardelli famously faced shareholders alone, when the board didn't show up to one of his shareholders meetings at Home Depot (NYSE: HD ) , and was berated by one shareholder after another for his "arrogance" and "excessive" pay.
But what if shareholder meetings were not only open to media, but also had to be shown to shareholders not in attendance? We have the technology to make this happen, after all, and as shareholders this is our one chance to hear about our companies from the people who run them.
The model of openness
Berkshire Hathaway (NYSE: BRK-B ) has been a model of openness to shareholders for decades. Berkshire's shareholder meeting is known as Woodstock for Capitalists because of its popularity, and now it even needs overflow from the biggest arena in Omaha. But not every CEO is as open or as charismatic as Warren Buffett and not even Berkshire is available for everyone to see. And if you're not able to make it to Omaha, you're out of luck.
There are companies who do allow shareholders to view annual meetings online, which is a great step in the right direction. World Wrestling Entertainment (NYSE: WWE ) may not be thought of as a leader in transparency, but it offers a replay of the company's shareholder meeting online. It's less of a surprise that Google's annual shareholder meeting can be found on YouTube. Walmart offers a very comprehensive replay of its annual meeting events, and so does Starbucks.
But not every company offers the same access to the shareholder event. Moreover, especially when times are bad, some companies give investors the bare minimum that the SEC requires and nothing more.
How hard can it be?
So how can companies be more open, and would it be difficult to pull off? Today, it shouldn't be difficult or expensive for companies to do.
Helix, a product from RealNetworks, would allow companies to stream to computers or mobile devices. YouTube would obviously be a free way for companies to upload shareholder meetings for later viewing. The bottom line is, it wouldn't be hard.
Giving investors access to a day with the people overseeing the companies we own doesn't seem like too much to ask. For companies that are small and don't receive public scrutiny, it may be even more important to get a peak into what management is thinking for a few hours or heaven forbid an entire day. If 82-year-old Warren Buffett can handle answering questions for that long, I think other CEOs should be able to take the time to talk with shareholders. Shouldn't that be part of the job description for their ever-increasing pay packages?
Can you view your annual meetings online? A number of high-profile companies archive videos of their annual shareholder meeting, but not a single company I own streams theirs.
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